PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 15, 2001

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[English]

The Chair (Mr. John Williams (St. Albert, Canadian Alliance)): Good afternoon, everybody.

Pursuant to Standing Order 108(3)(e), we have consideration of chapter 9, “Streamlining the Human Resource Management Regime: A Study of Changing Roles and Responsibilities”, of the April 2000 report of the Auditor General of Canada.

Our witnesses today are Ms. Sheila Fraser, the interim Auditor General of Canada, Ms. Maria Barrados, Assistant Auditor General, and Ms. Kathryn Elliott, Principal of the Audit Operations Branch, all from the Office of the Auditor General. And from the Treasury Board Secretariat we have Mr. Frank Claydon, Secretary of the Treasury Board and Comptroller General of Canada, Ms. Carole Swan, Associate Secretary of the Treasury Board, and Mr. Marcel Nouvet, Chief Human Resources Officer of the Treasury Board. So welcome all.

We'll start, as usual, with the opening statement from the interim Auditor General.

Ms. Sheila Fraser (Interim Auditor General of Canada): Thank you, Mr. Chair. I'd like to thank you and the committee for this opportunity to further discuss our recent work on human resources management, in particular certain aspects of the role played by Treasury Board.

Under the Financial Administration Act, the Treasury Board is the employer of the core public service. It is responsible for the size and shape of the public service of Canada and for the allocation and effective use of human resources in the public service.

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Under this act it has all responsibilities for human resource management, except for appointments and recourse that are the responsibility of the Public Service Commission under the Public Service Employment Act. It has delegated many of its responsibilities to deputy ministers under broad policy direction, but retains key responsibilities for areas such as benefits, pensions, collective bargaining, and the establishment of classification systems.

In our recent work, we have raised three specific issues that we wish to comment on further today. These are the current regime for human resources management, the need for classification reform, and the need for improved reporting.

In our chapter 9 we show that the Treasury Board plays an important part in the current regime for human resource management, which we characterized as unduly complex and outdated and requiring a clarification of roles, responsibilities, and accountabilities of the various players. Our work illustrates difficulties that result from the current regime and areas in need of improvement and modernization.

Chapter 21 of our December 2000 report on the post-secondary recruitment program illustrates the consequences of this complexity, particularly in human resource planning and forecasting. Although the Treasury Board is responsible for the overall size and shape of the public service and does some general demographic analysis, it has not set overall targets for recruitment for the public service. Neither the Treasury Board Secretariat nor the Public Service Commission has challenged departments on their recruitment plans or on their proposals for recruitment under the post-secondary recruitment program. Even though the government lists recruitment as one of its three human resource priorities, the responsibility for answering on progress is not clear.

[Translation]

In Chapter 22 of December 2000, we show that the classification system needs to be modernized. We conducted our audit of the new Universal Classification Standard within the context of the existing legislative framework—one that under the Canadian Human Rights Act requires a gender neutral system capable of measuring the relative value of work of all jobs, to ensure internal equity.

In Chapter 22, we noted that the current classification system is old, does not reflect the current nature of work done in the public service, and is costly to administer. Action also needs to be taken to meet Canadian Human Rights Tribunal decisions, and to streamline the system. The project to create a new system has been 10 years in the making, in part because of the complexity of the existing system.

A modern classification system needs to reconcile internal equity with market forces, skill shortages, and the collective bargaining environment. Within the existing legislative framework, the Treasury Board must find a way to balance these competing demands and reform the classification system. We believe the government has made significant progress, but as noted in our recommendations, work is still needed before proceeding to conversion. As well, costs and funding issues need to be addressed.

[English]

Finally, as we mentioned in chapter 9, Parliament does not receive adequate reports on human resource management issues. As the employer of the public service, Treasury Board must monitor matters it has delegated, ensure that emerging problems are identified and addressed, like the recruitment priority, and in turn report progress to Parliament. In rethinking the legislation, the government needs to clearly articulate the governance framework, as well as the roles and responsibilities of the various parties. It also needs to emphasize accountability in reporting on results to Parliament. The Treasury Board, as employer of the core public service, has a significant role to play in outlining the directions the public service needs to take.

Mr. Chair, this concludes our opening statement. We will be happy to answer any questions from the committee.

The Chair: Thank you very much, Ms. Fraser.

Now I will turn to Mr. Claydon for the opening remarks from the Treasury Board.

Mr. Frank Claydon (Secretary of the Treasury Board and Comptroller General of Canada): Thank you, Mr. Chair. Good afternoon, ladies and gentlemen.

I'm pleased to have this opportunity to be with you today to discuss the challenges we face in the field of human resource management, as well as some of the progress we've seen over the last few months.

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[Translation]

I took over the position of Secretary of Treasury Board a little over a year ago. Let me say that, over the last 12 months my admiration and respect for the Public Service as an institution has only grown. I share the President of the Treasury Board's conviction that the Public Service is one of Canada's greatest and most under-appreciated resources.

[English]

Of course, effectively managing such a large and varied workforce is challenging. As you well know, many individuals, including the Auditor General, have raised concerns about our current human resource practices. The Auditor General has identified, among other things, the need for greater clarity in the roles of the players on human resource management, the need to improve the efficiency of the system and to ensure fairness in the treatment of employees, as well as the need for better reporting. We welcome and appreciate this advice and guidance.

[Translation]

As you are aware, the Prime Minister recently announced the setting up of a Task Force on Modernizing Human Resources Management in the Public Service to look at the need for introducing legislative and structural reform to our human resources management system.

I know that Mel Cappe, the Clerk of the Privy Council and Ran Quail, the Head of the Task Force, will be appearing before this committee on Thursday, so I will leave it to them to discuss in more depth the Task Force's mandate and the approaches they are going to take. The Treasury Board Secretariat will provide whatever advice, expertise and material support is needed for the Task Force to complete their essential mandate.

In the meantime, the Treasury Board Secretariat will continue to identify and implement practical improvements that will accelerate our efforts to modernize human resources management in the Public Service.

[English]

For example, we hope we will soon be able to announce a new policy being developed in cooperation with departments and union representatives on the prevention and resolution of harassment in the workplace. We are working to modernize our travel policy to treat public servants better.

We have recognized that more needs to be done to make the public service truly representative of the population it serves. Last year the Treasury Board president endorsed the action plan of the task force on the participation of visible minorities in the federal public service entitled “Embracing Change in the Federal Public Service”.

The government has committed to some ambitious recruitment and promotion benchmarks, and we are now working with departments to ensure we monitor our progress toward those goals.

We are also working to build a more positive labour-management relationship. The report identifying the issues by the Fryer committee on labour-management relations is helping to guide our efforts. We expect a final report in June.

I want to mention one last area where a great deal of work continues to take place. I'm referring to classification reform. We are committed to classification reform that contributes to the government's ability to compete for talent in the job market and provide the flexibility needed to deliver quality services to Canadians. We are now examining a range of implementation options based on data that has been submitted by departments.

The progress of this analysis has not been as rapid as I would have liked, but, as you can imagine, this is a complex issue and due to its complexity it is taking more time than we thought to complete.

[Translation]

I should stress that modernizing our human resources management practices is a team effort. It impacts on every department and agency—and as such, everyone has an opportunity and a duty to make a meaningful contribution.

Our partners in the Public Service Commission and the Canadian Centre for Management Development are developing initiatives to support the work of the Task Force on modernizing human resources management in the Public Service. I know that you recently spoke to Scott Serson about work currently underway to strengthen recruitment.

[English]

As we move forward with changes to legislation, policies, and practices, we should recognize and appreciate that we have a very solid foundation on which to build. The results of the 1999 public service employee survey were encouraging. People feel overwhelmingly that their jobs are important and that they're making an important contribution to Canadians. I have strong hopes for the future of the public service and its capacity to provide excellent results for Canadians.

Mr. Chairman, I know you have a lot of questions that you've prepared and would like to ask, so I'll be happy to conclude my remarks here and to answer any questions you may have.

Thank you.

The Chair: Thank you, Mr. Claydon.

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First round, Mr. Peschisolido, eight minutes, please.

Mr. Joe Peschisolido (Richmond, Canadian Alliance): Ms. Fraser and Mr. Claydon, thank you very much for appearing before us.

In going through chapter 9 of the Auditor General's report, it seems as if the public service is oversized and inefficient. I would like to begin the questions by dealing with paragraph 9.80, where the Auditor General stated:

...the public service has one human resource management professional for every 28 employees.

—while in the private sector the ratio is about 1 to 100.

Can either or both Ms. Fraser and Mr. Claydon discuss that? It mentions some rationale for the huge discrepancy. Can you do two things for me: analyze why it is the way it is; and, secondly, what changes can occur to get greater efficiency?

The Chair: Why don't you go first, Mr. Claydon.

Mr. Frank Claydon: Thank you, Mr. Chair.

To get at this question, first of all, I'd like to just talk a little bit about the approach we want to take on human resource management. This is basically the approach that's laid out in “Results for Canadians”, which is the document that sets out the government's management framework and was tabled by Madame Robillard last spring. In this approach, we're trying to get away from what some characterize as a command and control approach to management. Whether it's financial management or human resource management, we want to move away from detailed rules and regulations, which are a major cause of the concern you've expressed in terms of the number of people we have to have for our employees to administer all of these rules and regulations. We want to move to a system that's based more on general guidelines or standards that are established by the Treasury Board and leave more flexibility for departments to interpret how these standards will be applied within departments.

As well, an important part of this is that there is monitoring of what's happening and feedback in terms of the success the departments are having in doing that.

So in a general sense, what we want to do is move to a less rules-based system. Part of the work of the task force that's just been appointed by the Prime Minister is going to be to look at those issues and how we can simplify the way human resources are administered within the federal government, and some of the complexities of our legislative and regulatory processes as well.

We think this is one way to get at your question—to reduce the complexity. I won't talk any more, but another is introduction of technology. We're working on that, and I can talk about that later, if you like.

The Chair: Do you have a brief comment, Ms. Fraser?

Ms. Sheila Fraser: I would just add that as we noted in chapter 9, the current systems are very complex. If you refer to our paragraph 9.8, we make reference to the fact that there are something like over 800 separate pay rates and 70,000 roles. Obviously to administer that kind of a complex system requires a lot of people to do it.

Mr. Joe Peschisolido: In the last report, paragraph 9.48, one thing the Auditor General talked about was that in order to get out of the culture of inefficiency.... An example is the old national revenue department, which was basically made an agency and became the CCRA. Could the problem be not just tinkering with rules and regulations, but the culture of the way the bureaucracy functions within Treasury Board, and a way out of it would be to have either an agency or perhaps even privatization of certain services?

Mr. Frank Claydon: Mr. Chair, I think there are a number of questions there. Certainly, I think the establishment of the various agencies that have been done recently has been in part because we wanted to look at the best way of providing service to Canadians in terms of those particular services. I think everyone would agree, for example, that our tax system is one that is very well done. The tax department is getting great reviews in terms of the service it is providing to Canadians.

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Part of that move as well was a different kind of regime in terms of human resources. My sense is that there isn't one size fits all in this. I don't think the answer is that we break up the federal government into hundreds of individual organizations. I think that would be a big mistake. My sense, though, is that we do need to have more flexibility in terms of how we administer the human resource regime within the federal government, and that's something we're looking at.

I wanted to mention a document that was circulated by the Treasury Board a couple of years ago called Framework for Good Human Resource Management in the Public Service. This is the kind of document where, rather than a whole bunch of detailed rules and regulations, we're trying to set out the basic performance measures against which we expect the public service to be judged. This is something the Treasury Board Secretariat has responsibility for reporting on in its reports on plans and priorities and in its departmental performance report. It is mentioned in there at the current time.

We see ourselves moving in the future to be able to report to parliamentarians in more detail in terms of how departments are carrying out responsibilities, as outlined in this document.

Mr. Joe Peschisolido: Mr. Claydon, the reason I asked the question the way I did...back in 1983 the Auditor General put forth the same type of report, had the same types of concerns about staffing and classification, and 17, 18 years later we're still at it, talking about simplification and rationalization.

I think right now we have a great opportunity, with I think it was called the demographic time bomb—basically a lot of people are going to be leaving the public service—and technology changes you mentioned, to perhaps get it right and lower the ratios dealing with inefficiencies.

What type of thinking outside the box, if I can use that phrase, could be employed? I'm not trying to prejudge the task force, but if you were to put forth two or three proposals that would deal with the...not inequities, but the huge differences in efficiencies, what would they be?

Mr. Frank Claydon: Mr. Chairman, I don't want to prejudge the task force either. I think we are heading towards a system where we're going to simplify the kinds of rules and regulations that are there. I think that's going to be seen coming from the work the task force is doing.

As well, I think we're trying to simplify by moving to a system that's less command and control based. That is going to simplify the system.

There are also a lot of good examples of technology being used. For example, we're now testing a system that is going to give any individual in the public service basic information online about their own human resource requirements, their pension, their various kinds of benefits, salary, leave, and so on. This will be something that will all be done by computer. It'll simplify the system a lot, and we won't need the same number of personnel to handle those kinds of details. Technology, I would say, is another way in which we'll get some improvement.

The Chair: Thank you very much, Mr. Peschisolido.

[Translation]

Mr. Desrochers. You have eight minutes, please.

Mr. Odina Desrochers (Lotbinière-L'Érable, BQ): Thank you, Mr. Chairman. Ms. Fraser and Mr. Claydon, thank you for your remarks.

I have questions for Mr. Claydon. In its remarks the Auditor General pointed out that the project to create a new system has been in the making for 10 years now, largely because of the complexity of the existing system. Could you explain how a system that has been in the making for 10 years is still not operational? This may seem to be a rather obvious question, but I would like an explanation. There must be costs associated with the range of systems you want to implement.

Mr. Frank Claydon: Mr. Chairman, might I ask for some clarification? Mr. Desrochers, are you talking about the classification system?

Mr. Odina Desrochers: Yes.

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Mr. Frank Claydon: I see, thank you.

Mr. Odina Desrochers: That is clearer now.

Mr. Frank Claydon: Mr. Desrochers, as the Auditor General said, the system is extremely complex, and any approach to modify it is therefore very complicated. In addition, any changes must be appropriate and thorough, because the system has an impact on almost every public service employee. I would rather have things done properly rather than done quickly. I know that the system has been in the making for 10 years, and we may need more time. I hope we do not, but that is how things stand. We simply cannot get results now.

Mr. Odina Desrochers: Is this because the work environment is changing so much, because the classification system in the Public Service is so much more complex than it was 20 years ago? Is that why the classification system has become more complicated?

Mr. Frank Claydon: I think that it has become so complex because we have added more and more regulations over the past 30 years. What we are now doing is making huge changes to reduce its complexity. Some changes have already been implemented. For example, there are now only 29 categories, instead of 72. That may still be too many, but at least it is a change. However, there are other major changes yet to be made.

Mr. Odina Desrochers: Mr. Claydon, among countries and states that are to some degree like us, and which you have consulted, do they experience the same classification problems and the same difficulty in modernizing the Public Service?

Mr. Frank Claydon: Yes, I think this problem is common to almost all countries. For example, the United States has a system which may be different but which is just as complex.

Mr. Odina Desrochers: Do you have a new timetable? When you say that your system has been in the making for 10 years, does this imply that you have a new timeframe? When do you think it will finally be implemented, and what are the costs associated with it?

Mr. Frank Claydon: We do not have an exact date for the implementation of the new system, but I hope that it will be in the next few months. As for costs, we are currently studying a number of options, and the costs will be contingent upon the option selected.

Mr. Odina Desrochers: That's all, Madam Chair.

[English]

The Vice-Chair (Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.)): Merci.

Mr. Bryden.

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.): Thank you, Madam Chairman.

If I may ask, are the wages in the unionized portion of the civil service significantly lower than equivalent occupations outside of the civil service? Can you give me a sense of that?

Mr. Frank Claydon: Mr. Chairman, I can give you some sense. As with most things, it's not straightforward and simple. Some recent studies suggest that for the lower-paid employees in the federal government, wages tend to be somewhat higher than the norm in the private sector, but as we move to the higher-paid public servants, they tend to be relatively lower paid compared with equivalent occupations outside of the federal government. This is one study, and I'm sure it's a bit of a generalization in terms of the conclusions, but there seems to be at least some evidence of that.

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Mr. John Bryden: I'm getting representations in my riding from public servants in the latter category who are higher in skills. They have submitted to me some fairly convincing evidence that equivalent occupations outside of the civil service are significantly higher paid.

I appreciate that, theoretically, one can't move overnight on an issue such as that. But are you not worried about the employees in that situation who are earning a much lower salary than what they might have earned in the private sector and thereby will get lower pensions? Is that not going to have an adverse effect on your internal morale and your recruitment drives in the future?

Mr. Frank Claydon: Madam Chair, there are several parts to this. In terms of people retiring and low morale because of low wages at the higher end, I think there's ample evidence that there are some concerns about morale. I think that's true. I think it's a credit to the public service as to how well we've done in terms of retaining employees and key professionals and managers who tend to be at that upper end. I think part of the reason is that the public service has a good pension plan, so that tends to offset to some extent areas where wages might be somewhat lower.

The other thing I should mention is that a lot of the people who are at the upper end are in the executive category, and over the last two years Treasury Board has led a drive to modernize the way we remunerate executives. In fact, we've found a way of linking the pay of executives to the private sector. So in essence we're no longer in a situation where the pay of executives will fall even more below the private sector. This is one thing that's helping in terms of the executives.

Mr. John Bryden: Are you planning to take similar measures with regard to the high-end skilled employees who are not in the executive class, who are significantly and arguably underpaid in comparison with outside the civil service, and who, as a consequence, are going to take a hit if they're within the final three or four years of their employment before being pensionable? Have you any plans with regard to that?

Mr. Frank Claydon: A number of things are being done. One thing I should mention is that for areas where we have a very tight market for skills, which is one of the areas you would be particularly concerned about, we have special allowances, which are called terminable allowances. These are negotiated through the collective bargaining process. These allowances allow us to bump up the pay of groups that are facing those labour shortages. So that's one way we're providing some relief to groups such as the computer services group and I believe as well some scientific groups. That's one way in which we're trying to provide some relief.

Mr. John Bryden: Do I have one more minute?

The Vice-Chair (Ms. Marlene Jennings): You have three more minutes.

Mr. John Bryden: Oh, I have time.

I just want to say that your coming before the committee gives me an opportunity to tell you that I'm getting my representations from a number of areas, such as engineers and immigration enforcement officers, and it's very difficult for an MP not to react compassionately to these cases because there seems to be a lot of merit in them.

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Is the collective bargaining process an obstacle to bringing relief to these particular job groups that have skills but are recognizably underpaid?

Mr. Frank Claydon: We are going to work through the collective bargaining process. As I said, there are a number of examples where we've been able to provide some relief to specific groups. I mention again the terminable allowances. If we had a system where we were to pay everyone individually or something.... But that's not our system. We're committed to a system of collective bargaining in partnership with the unions. We're working on a strong partnership with the unions, and we think we're making progress.

Mr. John Bryden: Basically, you can't change the job classification category of a particular type of employee from, say, PMO to PMO-4 for the last three years prior to falling into the pensionable status.

One of the things that struck me was the fact that enforcement officers have the same responsibilities as police officers—they deal with violence, and they have to carry the appropriate equipment equivalent to a constable—yet as PMO-2s their highest wage is $42,000. I wondered whether for that type of occupation there's any flexibility to temporarily move them up to a PMO-4 category. Is there enough flexibility in Treasury Board to do that kind of thing?

Mr. Frank Claydon: Madam Chair, perhaps I could ask my chief human resources officer, Mr. Nouvet, if he has a further comment on that.

Mr. Marcel Nouvet (Chief Human Resources Officer, Treasury Board of Canada Secretariat): I think the basic answer is that people are rated according to the classification system, which is based on their responsibilities. If their responsibilities increase, then they can get an upgrade in classification. So it really goes occupation by occupation. I've been in some departments where we've been able to do that when people's duties changed. For example, if people who worked in reception started making decisions on the front line in order to better serve Canadians, that resulted in an upgrade in classification.

With regard to enforcement, one of our key successes over the past year has been with regard to the correctional officers who are involved in enforcement. We had a compensation analysis done that gave us the business case for improving their remuneration without changing their classification when we compared them with others. So we can do an analysis in special cases to find the facts to substantiate an increase.

Mr. John Bryden: Thank you.

Thank you, Madam Chairman.

The Vice-Chair (Ms. Marlene Jennings): Thank you, Mr. Bryden.

We're now going to the second round. Mr. Peschisolido, four minutes.

Mr. Joe Peschisolido: Thank you, Madam Chairman.

Mr. Claydon, there's one thing that struck me a while back. We talked about this in this committee, but I was always told it's better to speak to Treasury Board, and here you are. It's the geographical limitations for workers within the public service. Can you clarify for me which workers this applies to? Can you give me a thumbnail sketch of how that functions and tell me what are the criteria and which jobs fall under that criteria? The second part is, what's the rationale for it?

Mr. Frank Claydon: I'm tempted to say that's really the responsibility of the Public Service Commission.

Some hon. members: Oh, oh!

The Vice-Chair (Ms. Marlene Jennings): Isn't that one of the reasons you're here, the right mandate and responsibilities?

Mr. Frank Claydon: In terms of exactly how the system functions and the criteria and so on, that is something the Public Service Commission does.

I'll ask Mr. Nouvet to give you some more information on that.

To some extent the rationale is simply the volume of people who would have to be dealt with if we were to go on a national basis for all competitions when in fact it looked like there was a reasonable selection within a geographic area.

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I think everyone realizes there are concerns about that in terms of Canada being a single nation and people having opportunities. When my minister, the President of the Treasury Board, was at another parliamentary committee last week, the transportation and government services committee, she said this was going to be looked at; we were going to look at the benefits and costs and ways we could try to make improvements in the system so it could be more national.

If you like, I could ask my officials to try to give you some additional—

Mr. Joe Peschisolido: Please, I'd like that.

Mr. Marcel Nouvet: I think Mr. Claydon has answered most of the question.

It's a question of volume and how to deal with the volume you might get when you post a job and open it up to the whole country. The Public Service Employment Act allows the commission to determine the criteria, for example, geographic limits, that prospective candidates must meet, and to expand these criteria when we're dealing with disadvantaged groups.

The other thing I would add is that legal advice and the Federal Court decision have confirmed that geographic limitations do not infringe on the charter, as long as they do not discriminate on the basis of an individual's province or territory of residence. As Mr. Claydon mentioned, I think there is consensus on the principle of open competition. But one must understand and get the full cost-benefit analysis before endorsement.

That is certainly one of the areas the task force on modernizing the human resource program will be looking at.

Mr. Joe Peschisolido: With respect, sir, I thought the whole point of this was to get volume.

We're talking here about shortages. Canada is a big country, and a great deal of the criticism that the Auditor General dealt with is that we are too bureaucratic, too rigid. With respect, the answer I got was a very bureaucratic, rigid answer.

The Vice-Chair (Ms. Marlene Jennings): This is your last question.

Mr. Joe Peschisolido: Okay.

Is there any way, given the technology and the nature of change, to look at graduates and people who are coming from Vancouver, St. John's, Winnipeg, Halifax? They may contribute to it.

Are there ways, given the concerns you've stated, that you can set up a system that will eliminate or mitigate the cost element to it, so you get people working for the Canadian federal government who live beyond Toronto, Montreal, and Ottawa? Even Toronto is not included.

Mr. Frank Claydon: Madam Chair, I guess it may sound bureaucratic, but I think the answer has to be that we are committed to looking at that and on a fast track.

We agree there is a concern and it should be addressed. We're going to look at every possible solution in terms of technology and other approaches that could be used to try to reduce the concern.

Obviously, this is a responsibility of the Public Service Commission, and they'll be doing the review, but certainly the president has made a commitment on this. I know she'll be following it closely.

The Vice-Chair (Ms. Marlene Jennings): Thank you.

We're in the second round. The next one is Mr. Finlay. You have four minutes.

Mr. John Finlay (Oxford, Lib.): Thank you, Madam Chairman.

I read and listened with interest to your statements, Mr. Claydon. You mention the President of the Treasury Board's conviction that the public service is one of Canada's greatest, most underappreciated resources. It's always been my feeling that this was probably true, having a fair amount of experience with bureaucracy in various other areas, education being one, of course, and other countries being another.

You say the results of the public service employee survey, which I think should be included in this, were encouraging. People felt overwhelmingly that their jobs are important and they are making a contribution to Canadians. I find the same feeling in my own employees in the constituency office. I think people feel that governments should serve the people, and if they can serve the people well, they're pleased by it.

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I do want to ask the Auditor General...I think you said, Ms. Fraser, that there were...how many pay rates...7,000?

Ms. Sheila Fraser: No, sorry, Madam Chair, in response, there are 70,000 rules governing pay and benefits and 840 separate pay rates.

Mr. John Finlay: Well, it really does strike me as gargantuan and really obscene that you can pretend to determine that this person is worth $12.50 an hour and we have 840 steps between that and whatever.

I would hope one might start by saying, well, perhaps 40 would be right, or 50, but surely not 840. And 70,000 rules, of course, will get you into 70,000 problems and 70,000 arguments. I think we'd better start simplifying from the bottom up somehow. People are happy with their work and they're well trained apparently and doing a good job. Let's build on that.

What are the things that make that so? It surely can't be, I hope, 840 pay rates that give people that attitude about their work.

Have you any comments on that?

Ms. Sheila Fraser: If I might, Madam Chair, in response to Mr. Finlay's comments, the point we were trying to make is that the current system is exceedingly complex, and in large part these numbers of pay rates are due to the classification system, over which Mr. Claydon has indicated there is a concern. The government is trying to move forward to simplify that. But that is critical to reducing this complexity, getting a much simpler classification system.

Mr. John Finlay: I've been toying with it, Madam Chair, in my mind a little bit. Take pay, for instance, negotiated union contracts and so on. The more classifications you have, the easier it is to satisfy everybody. The minute you take six and make them into one, you have two and a half below the mean, and two and a half above the mean. You can't take the two and a half above the mean and cut their salaries. That would increase the problems. You can take the two and a half below the mean and raise them, but we can't afford that. I don't know, unless you can get another 10%, 20% work out of them maybe. It's a very complex thing, but I think we really have to work at some simpler answers than....

The Vice-Chair (Ms. Marlene Jennings): Thank you.

Do either you, Mr. Claydon, or you, Ms. Fraser, have any comments on this last question/observation from Mr. Finlay before I go on to the next questioner?

Ms. Sheila Fraser: I would just say, Madam Chair, that I think Mr. Finlay has captured very well the essence of our audit on the classification system—the complexities and the need to simplify, but also the need to know the costs of any new classification system that would be introduced.

The Vice-Chair (Ms. Marlene Jennings): Thank you.

Mr. Murphy, you're next. Four minutes.

Mr. Shawn Murphy (Hillsborough, Lib.): My first question is to both Mr. Claydon and Madam Fraser.

I sense that Treasury Board and the Public Service Commission are struggling on this whole issue of human resources management. Mr. Desrochers dwelled on a similar type of issue. Is there any other jurisdiction that's a leader in this that we could gather some wisdom or some best practices from—Australia or New Zealand? Is there any area we can look to for guidance?

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Mr. Frank Claydon: My understanding is that we've canvassed the world in terms of trying to look at other models. I know the Auditor General did an audit of our project on classification reform, and I don't want to put words in the Auditor General's mouth, but they found that we'd done a very good job of managing this project and looking at all the possible ways of finding alternatives, that the project was well done.

As Mr. Finlay said, this is a very complicated thing that has been created over a period of time, and to change it, we want to get it right. We do want to get it down so that we don't have so many hurdles for people to have to jump through and that it doesn't take so much time to manage. Any time a person makes a little tiny move in the public service, oops, they've changed classification, so a whole bunch of paper has to float around. It's not the system we need for the 21st century.

Ms. Sheila Fraser: I would just add that in our work we have looked at other public service administrations, but as Madam Meredith was telling me, the contexts are very different from the Canadian context and so are not easily applied or put forward as models here.

Mr. Shawn Murphy: Perhaps this is more a comment than a question, and Mr. Desrochers touched on this, but it would seem to me that there would be a requirement for a critical path to do certain things by a certain time.

I know it's a very complex issue. It's very complicated, and to a certain extent you're dealing with a moving target also. Things are changing as we speak, but until there's a timeframe, agreed upon between all parties, I sense that we'd probably be back here in a couple of years and we may not be that much further ahead.

Mr. Frank Claydon: I don't want to give the impression that there isn't a tight timeframe on this, but I'm afraid to give a date and say it's going to be done by that time. We've done that a couple of times with this project, and we haven't been able to meet that timeframe.

I want you to know that I have a large group that is working on this. The Auditor General knows the large staff we have that is working night and day to find the right approach. Departments have helped us an awful lot in terms of providing the necessary data.

An immense amount of work has been done across the public service on this, and my hope is that we're close to finding the resolution. As Mr. Finlay said, there's no easy answer to this, but it's a lot of detail to work through and make sure you have something that treats people fairly and that puts our employees first in this, not a system that looks nice but doesn't treat employees well. We want something that is going to work.

The Vice-Chair (Ms. Marlene Jennings): Are there any further questions? Your time is up. We can come back again.

Mrs. Leung, you have four minutes.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Madam Chair.

You have an action plan to increase the participation of visible minorities. I think it's very good, but can you tell me what you have done in terms of a follow-up or evaluation of what you have achieved?

Mr. Frank Claydon: I am very pleased to be able to report on what we are doing in terms of employment equity, and in particular for visible minorities. We've been working very hard at implementing the Embracing Change report, which was presented to the Treasury Board last year.

We have been working with departments. I think my staff has been out to every department in the federal government to make sure they're implementing a plan. Again, this is an area where we could have said there are all these rules that you have to follow on how to get there in terms of employment equity. We had the broad benchmarks from Mr. Perinbam's task force that gave broad indications of where we had to get to. We said to departments, it's up to you to implement that; we'll help you to share best practices with one another. We've been doing that across departments, helping them share best practices.

We have also set up an advisory committee that has a number of people from outside of government. For example, Denise Chong, who was on the Perinbam task force, is a member of that committee. We have people from across Canada on that committee. They're helping us monitor; they're sensing how it's working in their own areas and giving us feedback. So we're careful that we see how this is in fact working.

• 1630

We've told departments that we are monitoring their progress and that we are going to be essentially bringing all that information together so that we will have a consolidated picture in the next few months in terms of the progress we've made, actual numerical progress. I would say it's still a bit early to see whether we're making progress in numerical terms.

I want to point out to you, though, that one of the activities we have undertaken is an employment equity job fair, which was held here in Ottawa a couple of months ago. Over 7,000 individuals came to that job fair and put their name in an inventory for jobs in the federal public service. These were all the way from people with multiple degrees and incredible experience in terms of engineering...and so on. So I think we're getting people to believe it can happen, particularly in the employment equity communities, and managers were there to ensure that we did get this inventory.

I think things like that are showing that there's a momentum and that we are making progress, and we are committed to ensuring that the monitoring is done both in terms of the quantitative side and qualitatively: Are we going to have the workplace of the future that is one in which everyone feels comfortable and we're not simply recruiting people in employment equity groups who then become dissatisfied and leave the public service? We don't want that, so we're looking at both sides.

Ms. Sophia Leung: Thank you.

When you say you already practise all of this, would you expand a little bit on how you practise in different public services, different departments? I know you had a kind of movement, as you indicated. Have you been doing that across Canada?

Mr. Frank Claydon: Yes, we've been meeting with representatives of departments in the public service across Canada. We've been out to all the regions. A number of departments have very large staff in the region, so we've met with them to pass this along.

The Chair: Thank you very much, Ms. Leung.

Ms. Sophia Leung: I haven't finished. I have four minutes. I've just started.

The Chair: You have had your four minutes.

Ms. Sophia Leung: No, you were out.

The Chair: I'm sorry, but the clock says four minutes. The clock was running before I came back.

Madam Jennings, please.

Ms. Marlene Jennings: Thank you, Mr. Chair. I'm going to continue on in the area that my esteemed colleague has been talking about.

So I'm correct in assuming, then, that Treasury Board, following Embracing Change in the Federal Public Service, has developed an action plan for its own recruitment and promotion of visible minorities in Treasury Board? So you'll be able to table a copy of that, if not today, then soon afterwards, before the public accounts committee?

You're the Treasury Board. You say you have met with all the departments. Have all of the government departments or agencies whose employees fall within the federal public service developed their own individual action plan to actually meet the recommendations in terms of hiring, recruiting, and promoting visible minorities within their own department or agency? Have they also developed a specific action plan with specific targets that you would then be able to table as well? I assume Treasury Board would have a copy of it, because you are the employer.

Mr. Frank Claydon: On the question of departments, we have sent out a circular asking them for information in terms of where they are at in implementing their plans. So we'll have that information. It's not physically in our hands at this time, but it will be soon, and we'll be glad to provide a report on that to the committee.

Ms. Marlene Jennings: If I'm not mistaken, Embracing Change was tabled in May 2000, and it was shortly thereafter that the President of the Treasury Board endorsed each and every recommendation.

• 1635

So we're talking about a year ago. You're telling me there are departments that have not provided you with specific information as to where they are right now in terms of the presence of visible minorities within their department or agency, what the active participation within the labour forces is, and what their targets are over the next year, three years, five years, in order to meet the target of one in every five? A year later, you still don't have all of that?

Mr. Frank Claydon: We have information in terms of where departments are, in terms of the extent of progress they've made. We've been working with them to develop the plans that are going to get us over the next five years.

A lot of departments have made progress on that already, but as yet we don't have all of the detailed plans from all the departments.

Ms. Marlene Jennings: What is your timeline? When do you expect to have them?

Mr. Frank Claydon: Well, we've sent out the request for the information. Perhaps Mr. Nouvet has the answer to that.

Mr. Marcel Nouvet: I think we will have the plans in the fall, but I'd like to take this opportunity, if I can, Mr. Chair, to point out that the recommendations that were adopted really called for benchmarks to be met in 2003, 2005. So while we know where departments sit today in terms of the representation of persons from visible minority groups, the next couple of years are really a ramping up period where they are working at the culture; they're working at understanding what exactly they must do in order to meet the benchmarks that the Embracing Change in the Federal Public Service report calls for.

But the first real benchmark test is in 2003, and action plans starting this fall are being assessed on an ongoing basis.

Ms. Marlene Jennings: My concern is that the Auditor General's report clearly stated that the Public Service Commission is responsible for the basic recruitment program, and one of the problems is that they don't even know what the needs are, because the majority of departments either don't report what their projections of their human resources needs are going to be in the short and medium term, or for those that do, the information may not be as accurate as it could be.

So my concern is that if you're already taking...you're talking about how you're going to get the information, you're hopeful, by fall 2001. The first benchmark date deadline is 2003. You're correct. That leaves only two years, and if we don't even know accurately what our needs are in terms of human resources recruitment, how the heck do you expect to meet the benchmark—if you don't even have accurate information there?

The plans are going to be based on inaccurate information. If a department—

The Chair: Let's hear the answer—

Ms. Marlene Jennings: Seriously, if a department is not reporting, then how the heck does that department meet a benchmark that's supposedly based on how many people they're going to be recruiting over the next short while if they don't even know how many people they're going to be recruiting?

So I see there appears to be a fault already built in to attaining these benchmarks.

Mr. Marcel Nouvet: Number one is that the departments are working very hard in having focused on developing their plans. What is playing in favour of our ability to meet these benchmarks is the demographics of the public service, understanding the percentage of people who will be retiring over the next three to ten years, and therefore the opportunity that arises, because we do have to replace people who are retiring with new people coming in and being more representative of the labour market.

The Chair: Well, I think Madam Jennings' point is that if you are going to be going through this major rejuvenation of the civil service by virtue of all these retirements that are coming up, surely this is the time you want to have your plans in place so you can correct any deficiencies, such as the visible minorities and so on. So why are you dragging your feet? That, I think, is the real question. You may not be prepared to take advantage of a real window of opportunity that's going to be coming along quite quickly.

• 1640

Mr. Frank Claydon: Mr. Chair, partly in answer to that question, I think there is a lot of activity that is going on in departments, and this is being supported by the Treasury Board Secretariat. I know, for example, we have done a lot of work in terms of upgrading the kind of demographic information that we are providing to departments. We have information that's targeted down to very specific types of occupations and occupational groups. As well, we're providing departments with the tools they need to be able to analyze that demographic data.

The departments are moving on that. We're also working with some of the particular communities of interest, the human resources community, the scientific community, where we're providing expertise and financial support for the development of recruitment plans by departments.

So I think there is a lot that's going on with departments, where the Treasury Board is providing advice and assistance to them to be able to get their plans in place.

The Chair: I think you can look forward to one of the recommendations of the committee being that you do more and do it faster in this particular area.

Mr. Shepherd, four minutes please.

Mr. Alex Shepherd (Durham, Lib.): Mr. Claydon, why did the government transfer the leadership network to the Treasury Board?

Mr. Frank Claydon: Mr. Chair, if I may I'd like to ask Madam Swan, my associate, to respond to that question.

Ms. Carole Swan (Associate Secretary of the Treasury Board, Treasury Board of Canada Secretariat): Thank you, Mr. Chair.

Thank you, Frank.

The leadership network was transferred to the Treasury Board Secretariat basically as part of the government's commitment to modernize human resources management in the public service. We were well aware of the recommendations of a number of sources that the whole human resources management regime was too complex and that accountabilities were not always clear.

It was felt that moving the leadership network closer to the secretariat, where it already had many strong relationships and accountabilities, would make more coherent the employer's role in terms of development and training and would help the leadership network in its mandate to basically support collective management of the senior management, the ADM community, and support networks of ADMs.

Mr. Alex Shepherd: Is this an attempt to streamline the fact that there seem to be so many different groups that are responsible for different types of employees within the civil service, to try to get this all in one place to some extent?

Ms. Carole Swan: It is in fact, Mr. Chair, streamlining. As I mentioned before, there were already very close relationships between the Treasury Board Secretariat and the leadership network in terms of the information we shared with them, the work we did to support collective management, and it was felt that to simplify the very complex human resources regime, this was one small step that could be taken quite quickly to rationalize and to streamline.

Mr. Alex Shepherd: But the orientation is to support the assistant deputy minister level of employment.

Ms. Carole Swan: Yes, it is.

Mr. Alex Shepherd: On the labour front, we have a number of labour negotiations pending. I don't know that anybody's actually in a strike position—some of them are getting close—but what does this—

The Chair: On Monday, I believe it is.

Mr. Alex Shepherd: What does the summer entail for labour relations in the public service?

Mr. Frank Claydon: Mr. Chair, if I may, I'd like to ask Monsieur Nouvet to respond to that.

Mr. Marcel Nouvet: I'm going to answer the question briefly, but I'd like to preface by saying that good negotiations do involve compromise on both sides. It's rare that we can just meet union demands, because we need to balance the interest of the employees with our overall fiscal responsibility to Canadians.

The second thing I'd like to offer as a preface is that in this current round of negotiations, we have reached agreements with various bargaining units, including financial services, the foreign services, the correctional offices, the printing services, and applied science and engineering, and the track record over the past two years has been pretty good in terms of reaching negotiated settlements with the bargaining agents.

We are right now in negotiations with both the Public Service Alliance of Canada and the Professional Institute of the Public Service of Canada, and we're at various stages of conciliation for the CSs. As a matter of fact, we have a conciliation board report, and we have accepted the recommendations. During this whole process, we remain hopeful that the parties can bridge their differences and reach a mutually acceptable collective agreement for employees.

• 1645

To answer your question about what will the summer bring us, it's very difficult to forecast that because it's a forecasting game, but we are cautiously optimistic that, as we have done in the past couple of years, we are going to be able to reach a negotiated agreement with the bargaining agents. But it's really cautious optimism.

Mr. Alex Shepherd: I'll ask the question that Mr. Williams is dying to ask you. Why are we only offering the PSAC people 2% and the executive people 8%?

Mr. Marcel Nouvet: It varies from occupational group to occupational group. The past two years clearly showed that where we have had compensation studies that justified above average increases for unionized employees, we have provided above average increases. We have done so for engineers, for the CXs, the correctional officers who are represented by the alliance, and we have done so for the IT workers. So where we have the business case, we go above the average.

Mr. Frank Claydon: Mr. Chairman, in terms of the 8% for the executives I think it's important to realize that's the first increase for a period of two years. It covers essentially a two-year span.

The Chair: We'll get that on the record for sure.

Very good, Mr. Shepherd. Mr. Murphy, please, for four minutes.

No questions there?

I see Madam Jennings has her hand up. She wants to pursue. Please do.

Ms. Marlene Jennings: Yes, she does. I want to come back to the issue of participation of visible minorities in the public service. I still do not find the responses satisfactory.

It's been more than 18 months since the report was tabled and close to a year from the time the government, through the President of Treasury Board, endorsed all the recommendations. You're expecting to have, through the various departments and agencies, clear targets and a clear plan of action as to how each intends on meeting the target as it pertains to their department.

I'm going to go off on another tangent. I received a letter recently from a member of the public service who's been an employee and a member of the federal public service now for over two decades and who is a member of a visible minority. He alleged that he was a victim, and is a victim, of racism within his department. He filed a complaint with the Human Rights Commission. It piqued my curiosity, so I began to do a little bit of research, and it appears there are some departments that have lamentable records in terms of creating an equitable work environment for members of visible minorities, as has been shown by the issue of gender in the past, etc.

In terms of the Treasury Board, what's your position when, as an employer, you become aware that in regard to a particular department there seem to be a number of complaints being generated that are coming forth, bubbling up to the surface, alleging racial discrimination, or discrimination based on one's ethnocultural origins, for instance? What do you do as an employer besides obviously ask Justice to represent the government in the quasi-judicial proceedings?

I know when I was in the para-public sector on the provincial side, where I had responsibility for investigating complaints alleging police misconduct, if we had a series of complaints coming from a particular geographical area, or pertaining to a particular police force where the complaints seemed to be of the same nature, we would sit down with the chief of police and with the other stakeholders and say, whether these complaints are ultimately substantiated or not there's obviously a real perception problem here. How can you address that?

So I'd like to know what you, as an employer, do when you see a particular department seems to have at the very least a perception problem?

• 1650

Mr. Frank Claydon: In fact, this kind of circumstance has happened and has come to my attention. What I do in those circumstances is I sit down with the deputy from the department and talk about what's happening and how they can move to make changes. So we do follow up.

Ms. Marlene Jennings: For instance, you have a certain amount of authority in terms of evaluating your deputies' or assistant deputies' performance. Do you make that part of their performance evaluation? For instance, if you've identified that there appears to be at the very least a perception problem, do you, when you sit down with them, say you will, when you're evaluating them, look at how they've dealt with this issue over the past year as one of the determining criteria? Does that become part of their performance evaluation? If so, great; if not, why?

Mr. Frank Claydon: In terms of the performance of deputies and for the ADMs, and so on, for deputies it's done by the clerk, and for—

Ms. Marlene Jennings: The clerk will be here and I'll be asking this same question of the clerk, so he's on notice.

Mr. Frank Claydon: Yes. Of course, for ADMs and so on in departments it would be done by the deputy. But in terms of my own experience, this is something I take into account in terms of evaluating my own senior staff, certainly not just in terms of the perception of mistreatment, but also, on the positive side, in terms of how much effort has been put into actually making a difference.

Ms. Marlene Jennings: Thank you. I'm done.

The Chair: Thank you. Thank you, Ms. Jennings.

Mr. Claydon, you mentioned earlier that for the last 30 years you've been wrestling—not you but the Treasury Board as the employer has been.... Pardon?

Mr. Frank Claydon: It feels like 30 years.

The Chair: We hope we can get the job done before the next 30 years.

But why is there so much inertia around the area of human resource management when it has to be one of the most critical elements of an effective, efficient, high-morale, enthusiastic public service? Why the inertia?

Mr. Frank Claydon: I'm not sure I have a great answer in terms of why there's the inertia. I think there have been, as you know, numerous reports and so on that have suggested that action needs to be taken. My sense is that right now the government is on a track that is going to break the inertia.

I think we have good support from the government, particularly through Madame Robillard and her position in this. I think we have excellent buy-in in the public service. I think we have the accumulated wisdom of the last 30 years, which is particularly important in terms of making change.

I think as well we've decided we have to look at the fundamentals, not just try to do something around the edges. We have to look at the fundamental legislation that underpins the system and make sure it is legislation that can allow us to simplify and allow us to put the responsibilities where they should be.

The Chair: Those are a lot of feel-good words, but we haven't seen any action so far. I know the minister has said that in the next 18 months we're going to see a major overhaul of the public service, and the human resource management and the framework and everything goes together. But with the “840 separate pay rates and 70,000 rules governing pay and benefits” and the “12,000 pages of instructions”, it seems to me.... That's a quote from the AG in paragraph 9.41 of chapter 9 of the report. It seems the situation has to be very bad before there's enough motivation to get things fixed.

We have computer services going on strike perhaps in another week. I can appreciate the fact that you have to negotiate hard and negotiate these issues down to the point that there's resolution on both sides, but there doesn't seem to be any motivation by the employees to jump on the President of the Treasury Board's bandwagon. So how do you feel you're going to get this job done in 18 months?

• 1655

Mr. Frank Claydon: Just one comment to clarify again. Actually the conciliation report we have on the CSs is a unanimous report. The employer agreed to a unanimous conciliation report, so we're hoping this will bring about a settlement and the CS workers will agree to it.

But in terms of how do we get momentum going in the public service, I think it's in part by having not just the activities of the task force and something coming at the end of 18 months; it's also by concerted action by other players, like the Treasury Board Secretariat, the PSC, and others. We talked for a minute, perhaps when you were out of the room, about this question of area of selection, and there's work that the Public Service Commission is doing on that. That's not something that has to wait for 18 months. It's something that can be done, hopefully, sooner. The Treasury Board Secretariat is working at new policies that will simplify our travel system. It will give new benefits to employees in terms of travel. We're also looking at a new policy in terms of anti-harassment.

When they're approved, these things will be done quickly. I think we have to demonstrate action.

The Chair: I go back to my point about inertia. You talk about an anti-harassment policy; Madam Jennings raised the issue of a visible minority policy. It seems that whenever we get around to it we may just get something implemented. How do we get the ball rolling and the ball moving? The fact that the minister says 18 months is no assurance that that's going to happen. That's my point.

Mr. Frank Claydon: My sense is that you do have a public service that is seized with the need for change. The demographics are one thing that are really pushing us. With 70% of our executives, for example, eligible to retire in the next ten years, that's a major incentive to get things changed quickly. So I think we've got the momentum to do it.

The Chair: When you talk about change and when the president talks about change, I hope we're talking about a complete revamp. Last week we talked to the Public Service Commission, an agent of Parliament to ensure, the theory is, a non-partisan civil service. But when we listened to them...they've delegated huge amounts of their authority to the departments, and you have delegated authority to the departments, and as I mentioned to you many times, I'm always critical if the Treasury Board delegates authority to the departments but never polices what they've delegated.

Madam Jennings raised this issue about what happens with departments that have the delegated authority but don't exercise it responsibly. I found last week that the Public Service Commission seemed to have a pretty lethargic attitude towards their responsibilities of finding out what the departments needed and hiring for that need. They didn't seem to know what the departments wanted, but they were hiring people...on some premise; I'm not exactly sure what.

How can we dovetail what the departments need, on what basis do they need it, what criteria will we have for hiring, and have an agency, be it the Public Service Commission or somebody else, do that hiring to get the job done? Is this going to be part of the plan? Is this going to be put in force, a more effective regime?

Mr. Frank Claydon: This is definitely part of the plan. We have to be able to recruit in reasonable timeframes and get the right people in. Part of the job the Treasury Board Secretariat is doing on this is to provide the kind of backup on the demographic side so that we know what we're talking about in terms of our needs for people. We've done a lot in the last year, and certainly there was impetus there from the work the Auditor General did to indicate that more needed to be achieved there. That's certainly one part where we're working hard with departments.

The Chair: So we can look forward to legislative proposals to revamp the hiring system, the Public Service Commission, to ensure they are focused and have the proper mandate. We can look forward to ensuring that the visible minorities are taken care of and other types of criteria that are required are taken care of. Can we look forward to that?

• 1700

Mr. Frank Claydon: That's what we're working towards in terms of reforming and modernizing.

The Chair: Is that a yes?

Mr. Frank Claydon: If it were in my hands, I'd say yes, but this is something that.... I don't want to prejudge exactly what the modernization task force will come forward with.

The Chair: UCS has always been one of my bugbears because I can never see UCS as being a satisfactory answer. I agree that a large organization needs to have structure in its pay, in its classification, to bring some sanity or order or comprehension to its payroll and to negotiations on working environment, salaries, and so on. But this great big matrix that says everybody is evaluated and put on a grid, and therefore if one person gets a raise it ripples all the way through the grid, and so on.... Are you going to get rid of UCS, or what are you going to do with UCS since it's obviously not working properly?

Mr. Frank Claydon: As I was explaining to the members, we are working through implementation options in terms of classification reform, and, as the Auditor General said, we're seized with the difficulties of trying to find an approach that balances the internal equity of the public service with the need to recruit people who meet our needs and to meet the competition of the private market. It's tough, and, as I said, I have a large staff working on that with departments, and we're trying to find an answer that's going to be the best one for our employees.

The Chair: We hope you're seized with the issue, Mr. Claydon—and not just seized—because we want to see some serious progress on this.

As I said, last week I was quite frustrated by the answers from the Public Service Commission. I see the responsibilities for human resources so diffuse that there doesn't seem to be anybody really driving the issue. I know Treasury Board handles the union negotiations, but we see delegated authority from the Treasury Board to the departments, we see delegated authority from the Public Service Commission to the departments, we see lack of reporting, lack of a collection of data.... We had the program review, a large downsizing of the public service, at great cost to the Canadian taxpayer, and now we're going to have to hire all these people back again because we find we let the wrong people go and 70% of the executives are going to be retiring in the next few years. That, to me, smacks of lack of planning and lack of designing the program, such as program review, to downsize. I have no problem with downsizing the civil service when it's required, but it's with such a broad program that it really didn't have any analysis to it.

Can we be assured that the Treasury Board is going to take the lead to revamp the human resource management regime of the Government of Canada to bring all these people together and make them work?

Mr. Frank Claydon: Mr. Chairman, we are part of the work that's going on with the modernization task force. It's the President of the Treasury Board who is the minister responsible for modernization. So as part of the team working with her to make this modernization happen, we're going to do everything we can to see that we end up with a really modern system.

The Chair: I'm trying to find out who's going to take charge of this. It's fine to say you're going to participate and so on, but who is taking charge? It doesn't seem to be the Public Service Commission. As I say, we have all this delegated authority. Who is going to take charge of this whole file and carry it through to conclusion?

Mr. Frank Claydon: I think that's something you'll want to speak to Mr. Cappe about when he's here on Thursday.

The Chair: I want to talk to Mr. Claydon about it too.

Mr. Frank Claydon: Yes. I think the reason we have this comprehensive approach to modernization is that we do have a number of players involved right now, and it's difficult for one player, even if it is the Treasury Board Secretariat, to say this is exactly how it's going to go. We do need a coordinated approach.

• 1705

The Chair: I didn't ask how it is going to go. I said, who is going to take charge? Is it the Treasury Board?

Mr. Frank Claydon: I would say it's the President of the Treasury Board who's going to be responsible for this.

The Chair: Okay. So the President of the Treasury Board is going to be the driving force on the human resource management regime, so that if delegated authorities are not lived up to or enacted properly, she's going to crack the whip—can I say that in Parliament? I guess I can. It's crack the whip all the time around here.

Ms. Marlene Jennings: Time's up.

The Chair: My time's up?

Can we have the assurance that the Treasury Board is going to take the lead on this issue and see it through to its adequate and proper conclusion?

Mr. Frank Claydon: I can give you that assurance, because the President of the Treasury Board has said very publicly that she takes that responsibility.

The Chair: Does anybody else have questions? I do.

Ms. Marlene Jennings: I think I have some other questions, Mr. Chair.

The Chair: Madam Jennings.

Ms. Marlene Jennings: I think I'll leave the issue of participation of visible minorities. I think we've covered it sufficiently. I want to look at the reform of the public service and all the rules and classification.

You've made it very clear that you have a large group of people working on significantly reducing the number of classifications, which are, I believe, 840, and trying equally to reduce the number of regulations, which are 70,000 as we speak. What is your objective in streamlining that? You must have an objective of perhaps reducing it by half, by 25%, by 60%. What is the objective, and how did you arrive at that objective?

Mr. Frank Claydon: I can't say we have an objective expressed as a percentage like that. What we want to do is get to where we can have reasonable mobility of people throughout the public service, where the people feel they're not inhibited by an incredible number of rules. My sense is that we've got to make a major reduction. I think 50% reduction would not be very much in respect of the overall complexity of it. We're looking at something that's very much changed from what we have now.

Ms. Marlene Jennings: But if 50% isn't a significant enough change, then you're talking about what, 75%, 80% reduction? Has any case study been done? I know you, Auditor General, in some aspects have tried to look at other jurisdictions, and you said it wasn't really a good fit. But consider the private sector, several multinational companies that have over 100,000 employees worldwide. How many job classifications would one expect to find there? How many rules and regulations for dealing with human resource management would one expect to find? I would assume that there's been some attempt to at least find another model that we can, if not take wholeheartedly, be inspired by.

Mr. Frank Claydon: I think, as the Auditor General's office has said, it's hard to find something that's very comparable. You can take a very large multinational company, but usually they have a few product lines that they're selling around the world, so it's a fairly simple organization, even though it's large. But when you look at the Government of Canada and the diversity of activities our employees are responsible for, it's incredible. I don't think there's any organization in the private sector that would have the diversity of things that we have to do. That tends to make human resources more complicated.

Ms. Marlene Jennings: I don't think that's quite true today. With the mergers that have gone on, the takeovers, the diversification, I think you have multinationals that are in completely diverse areas, from the food industry, to the fashion industry, to.... They're just diversifying their portfolio. I look at a company that's in my riding, for instance, Parmalat. It's the largest in milk produce. But that's not the only thing they do. They've bought up companies all over the place.

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So I think it's not quite true that large multinationals would only have a few product lines or services. I think it's increasingly complex. You have a company that used to produce transistor radios, like Sony, and now is all over the place with what it owns. I think you could find some examples of very diverse product lines, so you're talking about very diverse skills that are required, and then look at how many job classifications and rates they have, and how many internal rules. If it turns out it's as complex as the federal government, then a lot would say we're wasting our time trying to simplify it.

Mr. Frank Claydon: My sense from the research we did during the project is that we are a unique organization in our classification needs. We didn't identify any organizations we could really use as a benchmark, but perhaps....

The Chair: There are some other governments as well that you could look at.

Ms. Fraser has something to say.

Ms. Sheila Fraser: I'd just like to raise, Mr. Chair, two issues that I think are important to the discussion. The first is that the classification system is based on a model of a single employer and a single public service, and that, I would guess, is quite different from the private sector models, which tend to be much smaller units, in a whole conglomerate certainly, but very separate units. So that I think adds a lot of complexity.

The other issue that has to be considered is the human rights legislation, which legislates equity within all that, something which also imposes, I would say, an additional requirement and an additional complexity in the classification system.

Ms. Marlene Jennings: Well, yes and no, because if it's a federal company in the private sector, it's subject to the same legislation.

Ms. Sheila Fraser: But given a single public service with such a wide diversity of employment categories, to put the human rights legislation in with that makes it more difficult to do than in the private sector, where you would tend to have, I would think, more limited categories of employment.

The Chair: I would tend to agree with Madam Jennings. Take a large Canadian bank. They operate around the world in many cases. They have salary jurisdictions that are more expensive than Canada or a lot less expensive—all different kinds of situations where they work. They handle their human resources without 10,000 or 12,000 pages of rules and regulations. Why have we allowed the situation to get so complex, and what can we look forward to?

Mr. Frank Claydon: Mr. Chair, as to why it's become so complex, I'm not sure I can give you a good answer. With what we can look forward to, we are committed to significant reform of classification, and we want something that is simple, that works for our employees, where they've got the kind of career path and mobility within the public sector they deserve.

The Chair: Okay.

You talk about moving into the 21st century, and another issue I've raised periodically is merit pay. I think the days when everybody was paid according to the number of years on the job and according to the job classification they were in are gone by the board. Do you agree with that?

Mr. Frank Claydon: I think there are a number of advantages to merit pay. It's something we've introduced just recently in the executive category, the pay-at-risk system the Strong committee suggested and the government adopted. We're right now going through the second year of implementation of that. We've been evaluating how it's been going, and we think it's been going well.

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There was some concern we might see everyone being given the maximum amount of merit pay, but this hasn't been the case at all. It's been very much a normal bell curve in terms of compensation. We're quite optimistic about it and see it somewhat as a test case; we could look at it for other employees.

We have to be aware that we're dealing in a world where collective bargaining is part of the process. We want to develop good relations with our bargaining partners. So if we were to move that way, it would be something we'd want to discuss with them and consult with them on.

The Chair: But the bargaining partners speak on behalf of the employees, saying if we want employees who are participating in a 21st century regime, we will want merit pay. Therefore, I gather you're suggesting this HR review include an examination of merit pay, at least an examination of whether it can be done. Am I right in saying this?

Mr. Frank Claydon: Well, we're certainly looking at the executive pay as somewhat of a pilot project, an experiment, in terms of how merit pay can work.

The Chair: And are you looking to carry it forward as well, if it can be brought forward?

I see no reason why we can't make a commitment to examine how—if it's possible and feasible—to introduce merit pay to the civil service. Are you going to be looking at that at all?

Mr. Frank Claydon: It's something we are looking at. I can't give you any guarantee it'll be an option we would—

The Chair: No, I'm not asking for a guarantee at this time that you'd implement it, but I'm looking for a guarantee you'll look at the feasibility of it.

Mr. Frank Claydon: I can say we will be looking at the feasibility.

The Chair: Mr. Harb.

Mr. Mac Harb (Ottawa Centre, Lib.): First I wanted to congratulate you on your initiative in getting involved in the overall streamlining of the public service—in terms of the reporting in particular—and trying to remove as much duplication as possible.

In fact what you are doing is historic, because if we were to look back 30 or 40 years, not much has changed in our public service in a sense. What you are undertaking now is a monumental task, but also an extraordinary initiative that in fact is going to modernize the public service, bring about efficiencies, and eliminate duplications in terms of the reporting mechanism. This is important.

But it is my hope also that you will involve the management from the top down at every level in everything you do, as well as the employees themselves, because you'd be surprised how much these guys and girls know about the difficulties and challenges facing them when performing their duties and responsibilities.

Also it's imperative to get our partners in the private sector as well as taxpayers involved somehow. I don't know how you're going to get them involved in terms of their perceptions, but it is always important to see what's happening on the other side—how they see the public service—to try to deal with some of the shortcoming in terms of computerizing of the systems. You may sometimes have individuals call the public service only to be bounced from one spot to the next, so that by the end of the day what they are asking is not even on the menu.

So it's imperative. As someone who has a lot of public servants in his constituency, I tell you this has to be the most exciting initiative you have undertaken so far in the past 25 or 30 years that I have been living in the city. I tell you, Mr. Chair, it's going to be very exciting for us at the end of the day, when their report comes back before us, to see some of the recommendations coming out of it.

In terms of the timeline, when do you expect the ball to get rolling, and when do you expect to bring a report that will be made to Parliament and to cabinet?

Mr. Frank Claydon: Thank you.

There are three or four questions there to respond to.

On keeping in touch with managers, it is extremely important in terms of this initiative. We're going to be using our deputies' breakfast meetings to provide regular updates to all deputies of the ongoing progress of the review. We're going to be looking at other ways we can involve managers as well—and employees. It's important that employees are kept up to date.

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We've also committed to keeping our union partners involved in this as we go along. Actually, the chair of the task force, Ran Quail, has agreed to meet with the unions in early September at the national joint council to give them a full update on what's going on.

In terms of outside involvement, the task force will be supported by a private sector advisory committee—actually, it will be advisory to the Clerk of the Privy Council. It is going to give us a very broad range of opinions from across Canada. That's an important part of this as well.

In terms of timeframes, the timeframe Madame Robillard has committed to publicly is 18 months. We're committed to doing that. Everyone is working as hard as they can to get there. I don't think she's going to give us any leeway in terms of making sure we do it.

The Chair: Thank you very much, Mr. Harb. Thank you, Mr. Claydon. Thank you all.

We'll hear from the interim Auditor General and we'll wrap this up.

Ms. Fraser.

Ms. Sheila Fraser: Thank you, Mr. Chair.

To return to the three issues we raised in our opening remarks, we think the requirements are clearer roles and responsibilities—many of the issues coming up today go back to this subject—a streamlined and modern classification system, and better reporting to Parliament. We would also hope that, because of the importance of this issue, Parliament and its committees will continue to show interest in the subject.

The Chair: Thank you very much. We don't normally have a wrap-up from the department. We always give the Auditor General the last word.

On Thursday the meeting will be at 3:30 p.m. as usual. The witnesses will be the Clerk of the Privy Council, Mr. Cappe, and also Mr. Ran Quail, who is chairing the task force. We hope to see you all there.

The meeting is adjourned.