TRGO Committee Meeting

STANDING COMMITTEE ON TRANSPORT AND GOVERNMENT OPERATIONS

LE COMITÉ PERMANENT DES TRANSPORTS ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, March 22, 2001

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[English]

The Chair (Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)): Ladies and gentlemen, I'd like to call the meeting to order and invite Mr. Neville, who is here from the Treasury Board, to introduce our guests and start the meeting.

Mr. Richard J. Neville (Deputy Comptroller General, Treasury Board of Canada Secretariat): Mr. Chairman, I am pleased to be here today to present an overview of the activities of the Treasury Board Secretariat.

With me are Jane Cochran, senior director, risk, procurement and asset management policy sector, comptrollership branch; Glynnis French, assistant secretary, strategic planning and analysis division, human resources branch; and Jill Velenosi, deputy chief information officer.

At the end of this short overview, we'll be happy to answer any questions you may have on our respective areas of responsibility.

I'd like to share with you the Treasury Board committee's and the secretariat's major responsibilities and a little bit of background.

Treasury Board is one of four cabinet committees of the Queen's Privy Council of Canada. It was established in 1867 and given statutory powers in 1869. Madame Lucienne Robillard is the current President of the Treasury Board. She is also the Minister responsible for Infrastructure.

There is a listing of the members of the Treasury Board and the alternate members, which I won't go through, but it is available both in this document and on the web.

The formal role of the president is to chair the Treasury Board. She carries out her responsibility for the management of the government by translating the policies and programs approved by cabinet into operational reality, and by providing departments with the resources and the administrative environment they need to do their jobs.

Treasury Board is supported by its administrative arm, the Treasury Board Secretariat, which was part of the Department of Finance until it was proclaimed a department in 1966.

It is headed by the Secretary of the Treasury Board and the Comptroller General of Canada—and I might add that although Mr. Frank Claydon has two titles, he receives only one paycheque. He also reports to the President of the Treasury Board. The secretariat's dual mandate is to support the Treasury Board as a committee of ministers and to fulfil its statutory responsibilities as a central agency within government.

The Treasury Board Secretariat supports the board in its traditional roles as employer and general manager of the Government of Canada through the following specific responsibilities.

It negotiates union contracts on behalf of the government.

The secretariat supports the board by actively monitoring control systems, compiling information to assess program performance and integrity across the government and linking resources to results-based management.

It also approves departmental spending initiatives. For example, as the expenditure manager, Treasury Board is responsible for preparing the government's expenditure budget—what we call the estimates—and monitoring program spending in departments.

In addition, the secretariat helps to ensure that the government's overall policy directions are supported through risk management strategies and a results focus. It advises departments on the development of new policy initiatives and frameworks, as well as changes to existing programs to maintain their effectiveness.

The secretariat sets the form of the public accounts and establishes financial, accounting, administrative, and other management policies.

It also provides a comprehensive view of government operations.

Another important responsibility is that it provides leadership in the improvement of management practices. For example, as the employer, Treasury Board establishes the terms and conditions under which the public service attracts and retains the staff it needs to do its work. A special concern is to ensure the availability of service to the public and a working environment in both official languages, as well as the equitable participation of English- and French-speaking Canadians and of the members of four designated groups—women, persons with disabilities, visible minorities, and aboriginal people—in federal institutions.

As the general manager of the Government of Canada, Treasury Board provides the policy framework in such areas as accounting, audit and evaluation, contracting, financial management, information technology, real property, and regulatory affairs for the government's administrative practices and for its assets.

The secretariat also supports the president as the Minister responsible for Infrastructure by providing overall coordination of the Infrastructure Canada program.

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[Translation]

Treasury Board's powers derive from a number of statutes that provide the framework for government management. The most important of these are the following:

- The Access to Information Act, which gives to Canadian citizens as well as to corporations doing business in Canada—the public—the legal right to access federal government records under certain conditions;

- The Employment Equity Act, which assists members of designated groups—women, Aboriginals, people with disabilities and members of visible minorities—in achieving full and equitable representation within the federal public service;

- The Financial Administration Act, which creates the Board and grants it powers regarding the financial, personnel and administrative management of the Public Service as well as employment equity in the Public Service, and which establishes financial requirements for Crown corporations;

- The Official Languages Act, which gives Treasury Board the responsibility of coordinating the official languages programs in federal institutions;

- The Privacy Act, which gives Canadian citizens and anyone present in Canada access to federal information about themselves and which specifies how federal organizations are to collect, use, disclose, and retain personal information;

- The Public Service Reform Act, which, among other things, amends the Financial Administration Act to strengthen the Employment Equity Program within the Public Service;

- The Public Service Staff Relations Act, which establishes a structure for collective bargaining between the Treasury Board, as the employer, and the Public Service unions, which are organized into occupationally-defined bargaining units;

- The Public Service Superanuation Act, which is the most extensive of several acts covering the management of public-sector pensions;

- The Real Property Act, which deals with the acquisition, administration, and disposition of real property by the Government of Canada.

[English]

The Treasury Board functions as the catalyst for improving management practices. The management framework developed by the secretariat focuses on four main commitments to public sector excellence: focusing on citizens; embracing a clear set of public service values; managing for results; and ensuring responsible spending. Through a series of key initiatives, the secretariat, in its management board role, will advance these commitments that form the foundation of our agenda for change. I will touch on each one briefly.

Citizen-centred service delivery—improving access to services and improving client satisfaction—encompasses two key components: Service Canada and improving client satisfaction. Service Canada is designed to improve access to government programs and services using 1-800-O-Canada, the Canada site, and Service Canada access centres. The secretariat has also undertaken a survey to provide benchmark data against which departments will be able to assess their service improvements with the goal of increasing client satisfaction over the next five years by at least 10%.

Government of Canada On-Line gives Canadians secure, reliable, online access to federal services. The government online initiative will improve electronic service to Canadians while forging a stronger relationship between them and their government through electronic access to government information and services by 2004.

On modern comptrollership, integrating financial and non-financial performance information, implementing sound risk management, ensuring appropriate control systems, and updating related management policies, I am pleased to inform you that pilot projects in 15 departments representing, at this point, 60% of government expenditures have advanced the modernization of the comptrollership function across government.

On improving reporting to Parliament, improving the quality of information provided to parliamentarians on programs and results, the development of a website for parliamentarians providing information on program spending and results has improved the accessibility to reporting information for this key client group.

On program integrity, ensuring existing programs are adequately structured and resourced, the review of the 1999-2000 budget resulted in additional funding of $1.2 billion for 2000-01 and $1 billion for each of the next two fiscal years. The review ensures that the government's capacity to deliver existing programs essential for the health and safety of Canadians or critical to sustaining high-quality public services remains intact.

On developing an exemplary workplace, creating a workplace that fosters the leadership and participation necessary to deliver on this agenda for management change, the public service employee survey has identified workplace issues to be addressed in the development of an exemplary workplace. Most significant was the fact that 87% of the public service is proud of the work they do on a daily basis in serving Canadians.

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Mr. Chairman, this concludes my opening remarks. We would be more than pleased to answer any questions you or your committee members may wish to ask. Merci.

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

We'll go to the first round. John Williams, you have the floor.

Mr. John Williams (St. Albert, Canadian Alliance): Thank you, Mr. Chair.

Welcome, Mr. Neville, to the transport and government operations committee. We normally see each other at the public accounts committee, so it's nice to see you in another venue.

I noticed a couple of quotations in your opening statements. One says you “[provide] leadership in the improvement of management practices”, and the other, “Treasury Board Secretariat functions as the catalyst for improving management practices.” Given these two statements, and given the fact there were two audits on TAGS—one by the Auditor General at HRDC, and then another internal audit report on various programs in HRDC—it wasn't until the desperate state of management in that department became public knowledge that something was actually done. What's Treasury Board supposed to be doing in a situation in which gross incompetence and mismanagement have resulted in a billion-dollar boondoggle and so on?

Mr. Richard Neville: Mr. Chairman, I think it's fair to say we have been working very diligently with departments over the years in trying to improve management practices. This is nothing that has just started very recently; it's a question of how we have dealt with the issues as they have evolved.

Obviously, for the points that have been raised that are quite specific, we have dealt with those in a different context. Overall, though, I think it's fair to say, Mr. Chairman, that we have spent quite some time on improving modern management practices. We can cite a number of examples, whether it be the modern comptrollership initiatives, or “Results for Canadians”, which the President of the Treasury Board tabled in the House last year, and which is a framework for modern management practices. Again, if we were to take the time, I'd be pleased to share with you the contents of “Results for Canadians”, which has a number of good management practices in it, and a management framework that goes along with it.

Mr. John Williams: Thank you.

You talk about modern comptrollership and modern management, but even your new policy of audit and evaluation does not split the auditors off from the department. I wonder how an auditor can be independent in auditing a department's programs when he reports to the deputy minister of that department. Why wouldn't he be part of the Treasury Board Secretariat and be seconded to departments for doing the audits, and therefore be reporting to you and the President of the Treasury Board rather than to the DMs?

Mr. Richard Neville: Mr. Chairman, in developing the policy on internal audit and a separate policy on evaluation, we did discuss a number of options as to what the organization should look like and what the governance structure should be overall. I think it's fair to say that after consultation with a significant number of parties, both external to government and internal within government, it was quite clear the decision to have the internal audit capability reporting to the deputy minister was in fact the appropriate one. It is really a deputy minister's authority and accountability that is at stake in providing the services in a department. Therefore, it's very apropos that the internal audit community of that particular department report directly to the deputy minister.

Mr. John Williams: I just fundamentally and totally disagree with that statement, but we're not going to resolve it at this meeting.

The business of supply unfortunately means Parliament has given up trying to have an impact and a debate on the business of supply. We're going to spend, as you know, $170-odd-billion this coming year. I think about the Williams-Catterall report that was tabled in the House of Commons and was referred to the Treasury Board, with the negative response by the government last year to that report. Is there any hope the government is going to review that report and perhaps come down with a different answer?

Mr. Richard Neville: I think it's fair to say, Mr. Chairman, that a decision has been made by government to respond to that report. The decision is quite clear as to what actions have been taken. I'm of the view that until government changes its point of view, those decisions stand.

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Mr. John Williams: So you're saying you've passed the buck onto the government, but as a civil service and a representative of the civil service, can't you make some recommendation that perhaps it should be reviewed and that perhaps a different answer should be brought forward? And remember, it was a report by the procedure and House affairs committee that received all-party endorsement.

Mr. Richard Neville: I recall that, Mr. Chairman. Having said that, though, I believe the decision of the government has in fact been stated, and until the government decides to change its mind, that decision stands.

Mr. John Williams: You mentioned that the Public Sector Reform Act strengthens employment equity programs and so on. The universal classification system is not working well—and that may be a euphemism. Has any thought been given to moving the idea of equal pay for work of equal value out of the Canadian Human Rights Act into the Labour Relations Act or the Public Service Reform Act?

Mr. Richard Neville: Mr. Chairman, I'll ask my colleague Glynnis French to respond to that.

Ms. Glynnis French (Assistant Secretary, Human Resources Branch, Strategic Planning and Analysis Division, Treasury Board of Canada Secretariat): You'll note there have been some announcements recently in the Speech from the Throne about the need to reform the management regime for the public service. Accordingly, certainly all options are being looked at, but certainly no decisions have been made about what the components of that legislation would be and how we would in fact put together, for example, issues related to labour-management relations within the concept of a new regime for human resource management.

Mr. John Williams: So it's possible you could move it out of the Canadian Human Rights Act and put it into, say, the Public Service Reform Act?

Ms. Glynnis French: I can't say any decisions have been made, or even that such a thing has been looked at.

Mr. John Williams: No, I didn't say that. I just asked if it is possible that it could be an outcome.

Ms. Glynnis French: I can't comment on that at the moment. I'm not sure whether or not that's been contemplated by the government, or whether or not we're intending to leave the legislation completely status quo.

Mr. John Williams: The performance reports that were instituted just two or three years ago were dramatically below expectations as far as quality and a rigorous self-analysis of the departments are concerned. I think, for example—and this was a couple of years ago—of when the public accounts committee dealt with the dismal state of the social insurance numbers, which required a total revamp. Yet when I looked at the performance report of HRDC, there wasn't even a single mention of social insurance numbers. You wouldn't even know they were responsible for that particular area of service to Canadians, Mr. Neville. What is Treasury Board doing to try to elevate the standard of the performance reports so that they're credible reading rather than fluffy, self-serving statements by the departments?

Mr. Richard Neville: Mr. Chairman, I'm a little disappointed that the comment is focused on some of the negative aspects of the departmental performance reports, because there are a very significant number of positive components to those reports. First of all, we have departmental performance reports, one for each department. There were 87 of those tabled last fall, and I think that's significant progress in terms of trying to be more transparent, of trying to allow parliamentarians to have a better understanding of each one of the departments. So right off the bat, I'd have to say we have a document that is very professional in terms of how it has been prepared. In terms of the content, one can always improve.

Now, I'll spend a moment or two saying improvement's always possible. With respect to departmental performance reports, we'd like them to be more balanced. I would say it's a fair statement that they have in fact shown the positive side of departments maybe more so than they have shown some of the problems that have occurred. But we have tried significantly, and we will be tabling those shortly, as you probably are aware, or you should be. You'll probably find them to be more balanced this year than they were last year. We have certainly put an emphasis on having a more representative assessment of the departments' performances over the last year.

That being said, you always can improve, but I really would like to think the document we have tabled in Parliament for each department goes a long way to describing how a department has performed over the past year, compared to what was there previously—or the lack thereof.

Mr. John Williams: Perhaps the new Auditor General, when he takes up his office, may want to take a look at a departmental performance review and report to see if it actually does truly reflect the reality in the department.

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Getting back to the comptrollership and modern management issue, I was speaking in the House last night—and I seem to be picking on HRDC, although I don't know why I pick on HRDC—and, again, I was looking at the Auditor General's report on HRDC, which he tabled last fall. I'm talking about March madness, and I'm thinking of the Canada Jobs Fund. The monthly expenditures were $5 million to $7 million a month, but in the month of March they ballooned to $50 million. They did that two years in a row. Of course, in April they were then back down to $5 million to $7 million. And this was graphically laid out by the Auditor General. What can we do to ensure March madness, which is a waste of taxpayers' money, doesn't continue?

The Chair: Mr. Neville, you have about a minute and a half to answer that.

Mr. Richard Neville: Well, it will probably take me a couple of hours, but I'll try to do it in a minute and a half.

We also are very concerned about spending at year-end, obviously, and the government has tried to position itself to be more responsive. As you are aware, we made a decision a few years ago to allow a carry-over into the new year. That allows managers to plan their budgets. If they see at the end of the year that they're in a position to transfer some funds rather than spend them, we have given them the capability to do so. At this point, it is up to 5% of the operating budget, and it therefore allows some flexibility.

Mr. John Williams: But 5% isn't enough for this debt, particularly when they went from $5 million to $50 million. There were six months' expenditures in one month.

Mr. Richard Neville: It's 5% of the operating budget. That's not a 5% increase, it's 5% of the total budget, so it does allow some flexibility. I think that's one way we've dealt with it.

There's a change that has to take place. It's a change in culture. We are of the view that it is important to plan your budgets accordingly and to execute them in relation to the planned budget. Therefore, we have to spend more time with managers and provide them with the training to sensitize them to try to avoid the year-end spending. But we do concur that year-end spending is not good management in that sense.

The Chair: Thank you, Mr. Neville.

I'll move now to Marcel Proulx of the Liberals for ten minutes.

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you, Mr. Chair.

I want to welcome officials from Treasury Board. Some of them I've known fairly well from a previous life, so I know how professional they are. And we are not as negative on this side, normally.

I'm just curious—and I want to give you the chance to elaborate a little bit more on this—about this Government of Canada On-Line. I'm really curious about this—like a lot of Canadian citizens—in terms of when, how, how much, and so on. Could you elaborate on that for me, please?

Mr. Richard Neville: Yes. I'll ask my colleague Jill Velenosi to comment.

Ms. Jill Velenosi (Deputy Chief Information Officer, Treasury Board of Canada Secretariat): Mr. Chairman, we're very pleased with Government of Canada On-Line. It's our program to deliver programs and services over the Internet by 2004. It's a key component of our overall service delivery agenda, and also part of the overall strategy of reform in the public service.

Essentially, it's about offering Canadians choice over how they access services and information and conduct business with the Government of Canada. It's also aimed at using information technology to spur economic growth in the global e-commerce marketplace and in presenting Canada to the world as a major player in the digital economy.

Our target is 2004, and our target is to put a critical mass of services online for both Canadians and businesses to use, as well as to put in place a policy framework and common infrastructure that includes privacy and security elements to ensure Canadians can transact business with government easily and in a secure environment.

We met our targets for 2000 in December 2000. We have the redesigned Canada site up and running, we have gateways up for Canadians, for businesses, and for non-Canadians, and we have information on all federal programs and services online. And we have all forms in a downloadable format for use by Canadians and businesses.

Mr. Marcel Proulx: You've mentioned the Canada site. What's the line of division between sites administered by Treasury Board and other sites or ways of information managed through Public Works, such as the 1-800-O-Canada phone line? Do you look after the website while they look after the rest of the information tools? Is that the idea?

Ms. Jill Velenosi: Mr. Chairman, the Canada site and 1-800-O-Canada are administered by PWGSC, Public Works and Government Services Canada. Treasury Board's role is one of coordination overall for government online. The sites themselves are managed by the departments responsible for the program delivery. Treasury Board, like any other department, has its own website it administers.

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Mr. Marcel Proulx: Of course. Thank you. Is there anybody else on our side?

The Chair: Mr. Shepherd, since Marcel Proulx has a couple of minutes.

Mr. Alex Shepherd (Durham, Lib.): I want to follow up on some of Mr. Williams' comments.

First of all, internally, you have your own audit department, audit staff, and so forth. I presume these people are professionals.

Mr. Richard Neville: Very much so, yes.

Mr. Alex Shepherd: Do you feel, because they have one employer, that somehow their integrity is compromised? In other words, I think the one issue is the Auditor General, of course, but also your own internal audit staff. Given the fact that they work for Treasury Board and they comment on other departments, are they somehow compromised because they're government employees?

Mr. Richard Neville: Let's make this clear, unless I'm misunderstanding the question. Each department has its own internal audit capability. That's because deputy ministers are responsible for the affairs of their own departments in the delivery of services; hence, it only stands to reason that in order to have the assurance they're looking for within the department, they have an internal audit capability.

The Treasury Board Secretariat has an internal audit division, which is responsible for setting the policies for internal audit across government, plus ensuring there's a viable and professional internal audit community. They also ensure that if there are any specific issues that have to dealt with government-wide, the capability is there as well.

Mr. Alex Shepherd: Do you see any integrity problems that individual departments have their own audit departments rather than another department of government?

Mr. Richard Neville: No. I don't see a problem. Again, we had that discussion on a couple of instances, and in each case different groups came to the same conclusion that the way in which we have structured it is the correct way to do it.

Mr. Alex Shepherd: We talk about performance reports. I understand that on Monday there were some awards that were actually given to some of the departments for excellence in the preparation of performance reports.

Mr. Richard Neville: Yes.

Mr. Alex Shepherd: Maybe you could tell us something about that.

Mr. Richard Neville: Yes. Mr Chairman, I'm pleased to announce that, again, in trying to improve on the departmental performance reports, which is still somewhat new in government as a concept, we have tried to look at how to improve the quality of those reports. We actually had a ceremony whereby we had awards given out to the departments that best improved their departmental performance reports over the previous year, in terms of having both more disclosure and more meaningful performance indicators, which have made it a lot easier to determine the performance during this past year.

Again, we're trying constantly, Mr. Chairman, to try to improve on the departmental performance reports.

Mr. Alex Shepherd: Mr. Williams also talked about March madness, and presumably what goes on with that thought process is that all this money that was spent by these departments somehow had been wasted. In fact, there probably is a balloon of activity, I presume, around the year-end date. Do you have any evidence that the majority, or even a significant amount, of money has been wasted by expenditures that occurred in March?

Mr. Richard Neville: No. We don't have concrete evidence that this is in fact the case. However, when you do look at the financial results for March, you see a higher level of activity.

Having been a senior line manager myself in the regions, in several regions as a matter of fact, I recall distinctly that we tried to ensure that all promises that were given out, i.e. in terms of activity, would try to be met by the end of the fiscal year. Hence, February and March were very busy periods for us.

As a result, our financial activity reports indicated that. So I'm not surprised, and it's in line with the program activities. It's audited subsequently, as you can appreciate. We haven't had comments back that the money hasn't been spent for worthwhile reasons. But it still is an inequity in terms of the traditional flow of expenditures month by month.

I want to repeat that we're trying to avoid any spendings that would not be necessary in March by allowing the carry-forward to the new year. I think this is a practice that has served us well. We think it has deflated the March madness—not completely eliminated it, but deflated the practice per se. I think if you ask departments, they certainly appreciate that initiative and would like to see it continue, as we plan on doing.

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The Chair: Thank you, Mr. Shepherd.

I'll go to Mario Laframboise of the Bloc Québécois.

[Translation]

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ): Thank you, Mr. Chairman.

Your organization prepares the expenditure strategies and reviews programs with the departments. Am I right? Could you tell me what would be, for the next fiscal year, the program expenditures for the Department of Transport?

Mr. Richard Neville: We prepare the Estimates, a book which is about 3 inches thick, and which is subdivided by department. It's a public document, but I would have to have it in front of me to give you the specific program expenditures for the Department of Transports.

Mr. Mario Laframboise: You come here, before the Committee on Transport and you don't have the information regarding this department?

Mr. Richard Neville: I am here on behalf of the Treasury Board Secretariat.

Mr. Mario Laframboise: I know, but you are invited by the Committee on Transport, and you don't have the information regarding that Department.

Mr. Richard Neville: No. This is not a question I expected to be raised. As I understand, this is the Standing Committee on Transport and Government Operations. The Treasury Board Secretariat is making a presentation which falls under the second category of the Committee's responsibilities, government operations. It's in this context that we are making our presentation today.

Mr. Mario Laframboise: No further questions. Thank you.

[English]

The Chair: Mr. Neville, if you don't have information with you, you could forward it to the committee, when possible, if a question is asked.

Mr. Richard Neville: Sure. I understand that, Mr. Chairman.

The Chair: Mario, are you finished? I think I'll go to Andy Burton then.

Mr. Andy Burton (Skeena, Canadian Alliance): Thank you, Mr. Chairman.

I'd like to thank the officials for attending today. When we were briefed by the ADM from Public Works, they basically suggested that the questions were more appropriately put to the Treasury Board officials. So here we go.

Do you feel the current guidelines in contracting are effective and produce competition in procurement totally, or are there some loopholes there?

Mr. Richard Neville: I'll start it off, but I'll ask my colleague to add a few comments.

I am certainly of the view that our current policies encourage competition, and I'll go so far as to say that the results will prove this, in that Canada is the most competitive in terms of procurement in the western world. I want to make sure we're clear on this: Canada is the most competitive in the western world in terms of procurement.

But I'll ask my colleague Jane Cochran to add a few comments.

Ms. Jane Cochran (Senior Director, Procurement Policy, Treasury Board of Canada Secretariat): I would share this view in that we also have probably taken that question of internal competition even farther than some others. For example, signing the Agreement on Internal Trade in Canada and including a procurement chapter in it is something that's unique to us. For example, the United States has no comparable piece of trade legislation in place.

I think also that our departmental officials strongly support competition. I think the fact that they show a great deal of professional integrity in how they do their work for the most part reflects that commitment to competition. It's clear in the policy that enhancing competition is one of the critical pieces of achieving the overall balance in terms of value for money for Canadians.

Mr. Andy Burton: How about the level of sole-source contracting? It appears that it's relatively high. Do you feel this might be a bit of an abuse of the sole-sourcing process?

Ms. Jane Cochran: When I look at the statistics, we're not out of line with other governments, and in fact we do have instruments that push competition probably farther than others. When we look at the use of MERX, when we look at the use of advance contract award notices, when we look at how Canadians generally have access to good information on government contracting through Contracts Canada, I think there's great opportunity for suppliers to participate.

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Mr. Andy Burton: Are there any penalties for department officials if the guidelines are not followed? If there are some difficulties in that respect, is there a penalty? What happens?

Ms. Jane Cochran: It varies depending on what instrument you're talking about. In the case of NAFTA or the Agreement on Internal Trade, there are actual costs that the crown has to pay in the event that there's a finding in favour of the supplier. So that could be lost profit; it could be bid costs.

Mr. Andy Burton: I was referring more to within the department, if a department official is perhaps abusing the sole-sourcing system. Are there penalties within the system?

Ms. Jane Cochran: A departmental deputy minister, in essence, will look at his own internal delegation instruments and authorities and may withdraw those from the individuals who work for them.

Mr. Richard Neville: I will add one more point, if I could.

Mr. Andy Burton: Okay.

Mr. Richard Neville: When a ruling goes against the department, the department is responsible for incurring those expenditures, and, in effect, it becomes part of their budget, in terms of how they would provide for it. So there is a penalty in the sense that the department has to incur that expenditure, which was not necessarily planned for.

Mr. Andy Burton: Are ACANs classified as competitive or sole-source?

Ms. Jane Cochran: Competitive.

Mr. Andy Burton: Can you explain that? That's an advance contract award notice.

Ms. Jane Cochran: That's right.

Mr. Andy Burton: So, basically, you're saying that if we don't hear from some other supplier, this is who it's going to—is that sort of the way it works? So how would that be competitive?

Ms. Jane Cochran: There's a number of steps. In the case of a sole-source, whether you're talking about Canada or elsewhere, in essence what that is is you go to one single source, you negotiate, and you put in place the contractual instruments in order to award the contract. There may or may not be public notice of that, and there'll be very little transparency whatsoever about that process. And that's basically the way it's set up in policy in Canada, the United States, and internationally.

In an advance contract award notice, however, what one must do...and we have taken steps to in fact strengthen it because it is an area that was identified both by the public accounts committee and by the standing committee on operations in 1997, as well as in Auditor General reports, as a particular area of concern. What we have done, and what in essence makes an ACAN different, is the fact that long before we award a contract to a company, we in fact go out and tell companies on the web, on the MERX system, that these are the government's requirements, these are the kinds of capabilities that we want a supplier to have. A supplier then has an opportunity to come in and say, I have these capabilities.

This is what we used to call a challenge. Now, because we don't want to discourage that supplier from coming forward, we call that a statement of capabilities, where they literally say, this is why I should be considered, and here are my capabilities in order to deliver the work you want. Officials will look at that. In the event that an official in government doesn't think that company meets the requirements as we've set out in the ACAN, they must go either to another contract review mechanism or senior official, but someone who is independent of the original decision to post an ACAN. They will examine that and may or may not proceed.

In the event it's decided that, yes, this company should be considered, then we go into a full tendering process. Our RFP will be put on the street; they have the opportunity, through a reasonable bid period, in which to develop their response and may bid for that contract. This is unlike that one-to-one discussion, which has very little transparency about it, offers no opportunity for another company to even know that this necessarily is taking place, and in fact, quite frankly, is based in law—because that's what a sole-source contract is in law. Then there is a significant difference between an ACAN and a sole-source.

Mr. Andy Burton: Do you have a breakdown—how much time do I have, Mr. Chairman?

The Chair: About a minute.

Mr. Andy Burton: Do you have a breakdown on what percentage of overall contracting—both in numbers and then, of course, in dollars, which could be totally different—is done through ACAN or sole-source?

Ms. Jane Cochran: It's about, on average, 18%, 19% for the last two years, both in terms of numbers and value. But we can give you a full breakdown of all the reports.

Mrs. Bev Desjarlais (Churchill, NDP): One point of clarification on that. I believe we asked previously for that information from other witnesses. Has that been made available to the committee as yet? But there was a request that went in? Okay.

The Chair: Okay, we'll check the list and make sure that—

Mr. Richard Neville: If I could, Mr. Chairman, I'm surprised who that request would have been made to because it really would be through our office that we would provide that, unless somebody had access to it. It is available, but it just seems odd.

Mr. Paul Szabo (Mississauga South, Lib.): It's Jane.

Mr. Richard Neville: Oh, fine. We work very closely. That's fine.

Ms. Jane Cochran: And it is posted on our website.

The Chair: Okay, Larry.

• 1145

Mr. Larry Bagnell (Yukon, Lib.): Just a couple of points.

Having been a federal director, one of the problems to solve the March thing might be to try to do more staggering of program deadline dates. You know, everyone independently realizes the money has to be spent by March 31 so they have deadline dates that would allow them to process it and make their decisions. I was always trying to discipline those to be several months earlier so that you could sort them all out and then get on to the surplus, and have the bigger expenditures a couple of months before year-end.

I just want to comment on the O-Canada phone number and the website and Canada online. I think that's great. I encourage you to do as much as possible for rural Canada because this puts us more in touch with rural Canada.

Rural Canada has been alienated in a non-partisan way from the federal government, just because you can't have a federal employee in every small community for every department, obviously. But technology has, through no fault of our own, dropped this wonderful opportunity in our lap to connect with Canadians.

I think they really appreciate it in rural Canada and become more in touch with what the federal government can actually provide them, and they can do it in their home town rather than driving six hours to fill out a form or something.

I also encourage you to give every support to the rural initiative, which is a couple of years old and which has been great for rural Canada. I'd just like to ask in that respect: one of the items of the rural initiative is the rural lens, where, in every element, everything approved by Treasury Board should also be reviewed by the rural lens and analysed by the rural lens to ensure that...just to take a look at it from our perspective in rural Canada as to the effect of that initiative. I would just like to ask if you have been successful in reviewing all initiatives through that rural lens.

Mr. Richard Neville: I think you raised three points. The first point was dealing with March expenditures, the second dealt with Canada online, and the third was the rural initiative. I'll deal with the first and third, and I'll ask my colleague to deal with the second one after.

With respect to the first one, moving the deadlines forward, we have discussed that with a number of departments. That's certainly another way of dealing with it. Again, in my own case, when I was in the regions we had actually moved the March year-end to February so we could get our key deliverables out the door, and that left us with March to do some cleanup. It didn't always work, but we certainly had that same approach. Again, in discussions with departments in the last two years, we certainly have spent more time on that issue, trying to find alternate ways to reduce the expenses at year-end. So the program sectors are very much involved in that.

On the rural initiative, we have been working more closely with those departments that have programs dealing with rural parts of the country. I'm not sure to what extent we have been using that rural lens approach. That's something I wouldn't mind finding out more about myself and coming back to. It's not in my particular domain, and I don't think it falls under the purview of any of my colleagues at the table. So, on that one, Mr. Chairman, I would like to come back to the committee with a more accurate report.

I'll ask my colleague Jill Velenosi again to deal with the Canada online issue.

Ms. Jill Velenosi: Perhaps only to comment, Mr. Chairman. I agree with the comment made that technology can be a tremendous equalizer, and we will truly see the death of distance. Within the government online framework, we're very conscious of the capacity and ability to overcome and address issues on the rural agenda, as well as accessibility for all Canadians.

Mr. Larry Bagnell: I still have some time?

The Chair: Yes, you do. Good question, by the way, on the rural thing.

Mr. Larry Bagnell: Just a quick briefing on the rural lens—basically, it's for all central agencies. Anything they do now in theory is supposed to go through that. Actually, it would probably affect most greatly departments that do not have rural things in their portfolios, because then they would be less sensitive to the effects of their initiatives on rural Canada. So it's supposed to be any initiative that goes through any central agency. Andy Mitchell's people could maybe outline more.

My other question is related to infrastructure, because I noticed in the briefing you handed out that you provide support to the minister also in her infrastructure responsibilities. In the north, we've been lobbying for the last couple of years on the fact that infrastructure in the north, where you have permafrost and maybe five taxpayers per mile of road or sewer as opposed to a thousand, is obviously far more expensive, and per capita distribution of infrastructure money makes absolutely no sense. You can hardly do anything in that respect in the north. So we've been lobbying either for a larger fixed amount for northern jurisdictions as a base amount and then go to the population base, or indeed a separate northern infrastructure program. I wonder if at the administration level you've either recognized that or pursued it at all.

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Mr. Richard Neville: It's my understanding, Mr. Chairman, that those kinds of discussions have been undertaken, but I really am not at liberty to go any further on that.

Mr. Chairman, before you go to the next question, if I could, I have a note from a colleague that says quite clearly that Public Works and Government Services has agreed to provide a listing of contracts over $1 million to this committee, and I expect that would be broken out. They're in the midst of doing that, so that would probably answer your question.

The Chair: Are you finished, Larry? We'll go to Bev Desjarlais of the NDP.

Ms. Bev Desjarlais: With regard to the ACANs, has there been criticism from suppliers that the length of time the ACANs are posted is not long enough? I understand it's 15 days.

Ms. Jane Cochran: ACANs is not something we hear much—

Ms. Bev Desjarlais: I only have a few minutes, so I just want you to answer the question: has there been criticism from any other suppliers that the time limit is not long enough?

Ms. Jane Cochran: Not directly to Treasury Board, no.

Ms. Bev Desjarlais: Has there been criticism indirectly or directly to any other departments?

Ms. Jane Cochran: It is a view that has been expressed but not substantiated.

Ms. Bev Desjarlais: In all fairness, I don't want to have to dig a big hole here to get the information, so please don't try to wiggle around it. My question was, has there been criticism? Now you're telling me—after having to ask it three times—yes, there has been. Please be very clear and up front with your answers.

Ms. Jane Cochran: No, I think what I clearly said to you is that it hasn't come directly to Treasury Board.

Where I have heard this criticism from is the Auditor General's office, that they have been contacted. Have I seen anything that substantiates that in the course of my work? No. But the Auditor General's office has taken the time to give me that information, and we've taken that into account and thought about it.

We hear as well that by some people's standards, that period is too long from an operational effectiveness perspective. Some suppliers also tell us that our procurement system is too long. I think the concern that was expressed by some companies, from what I understand from the Auditor General's office, is that it perhaps did not give them adequate preparation time, in their minds. But the bottom line on that is that the ACAN period is not the period in which we expect them to actually do that bid preparation. We will go out with a full tendering procedure with all of the pieces of work that go into that, such as the statement of requirements, so that they do have an opportunity to go through that process. For example, if we were talking about something subject to NAFTA, that bid period would be 40 days.

Ms. Bev Desjarlais: With regard to this March spending spree, is there ever an audit or a review done of those expenditures that happens in March in any given department?

Mr. Richard Neville: It's done in many ways. First of all, the internal audit capability within a department would have as part of its normal audit program to look at expenditures all through the year. I think it's only fair to say that they would focus in as well on March expenditures to make sure they're in line with program authorities. So that's one way of doing it.

Secondly, we do have the Office of the Auditor General, which carries out audits at a departmental level. Therefore, staff on site would see what the expenditures are. As part of their audit program, they look at all large transactions. So that would be picked up that way.

From Treasury Board's perspective, we try to work very closely with departments in the program sectors to understand what their expenditures are and how they've met their requirements. That's another way. It's not as formal as the first two, but certainly it's an indirect way of doing it.

Ms. Bev Desjarlais: I have another short question. Members of Parliament also have the 5% carry-over on their budgets. Is there a spending spree with members' budgets as well?

Mr. Richard Neville: I think most departments, including—

Ms. Bev Desjarlais: And that's not being asked in a partisan manner. I'm just talking in general.

Mr. Richard Neville: The short answer is yes.

Ms. Bev Desjarlais: Thank you.

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The Chair: I'll go to Brent St. Denis of the Liberal Party.

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chairman.

I'd like to comment on Bev's last point, the so-called March spending spree or March madness, the notion that as you get toward the end of a budget year, there might be a tendency to spend more. If in planning your year you haven't had any surprises, as you get to the end of the year, you can relax and say I'm past worrying about any surprises, so I can use the money I set aside for that computer I know I need. It would make sense that you would do that in March, having 11 out of 12 months of possible surprises behind you. So I don't think characterizing it as March madness or a spending spree is a proper characterization of what only human nature would tend to do.

Mr. Neville, I thank you and your colleagues for being here.

This may be more of a comment than a question, Mr. Neville. It may be something you could get back to us on, or it may be more appropriate for Public Works. My colleague Mr. Szabo could guide me on this. It goes back to Mr. Bagnell's question about the rural lens.

I had a situation in my riding once where a fellow who lived in a small town felt he could supply a certain kind of item as well as anybody else. I have a huge northern Ontario riding, and he happened to be a million miles away from Winnipeg or Toronto. The system required that you look at a sample of the thing that was being procured. Samples cost money, so you can't make enough samples for everybody who has a notion they could bid on something.

It seemed to me that where samples are required, there might be a way or a compromise where people who are far away from the major centres could have a look at samples without travelling a large distance, which in his case was eight hours one way to Toronto. They could actually put up a bond to cover the cost of the sample, which would be shipped to them on the condition that they ship it back within 48 hours, as long as it wasn't a truck or something, obviously, but rather something that was shippable.

I leave that there as a comment, unless you feel you have something to say.

Mr. Richard Neville: Mr. Chairman, I am familiar with that particular scenario, having been, as I said, a regional director general responsible for procurement for a couple of regions across Canada.

I have had that come up as a specific problem in northern Alberta, as an example. We were able to work out an arrangement between the supplier and the department concerned that they could go to the local office and view the sample and not necessarily have to travel the six or seven hours required. I think it's a matter of working out the specifics. If there's a willingness to be cooperative, it probably can be done.

Mr. Brent St. Denis: There's no local office either. Also, it's only six hours away.

Mr. Richard Neville: What I'm trying to say is there are situations...and where there's a will there's a way. On the other hand, I am also realistic. There are instances where it is not possible to have that kind of an arrangement. But I did incur a similar case, and we did deal with it by having them go right to the local office. That constituted a review of the sample.

Mr. Brent St. Denis: Thank you, Mr. Chairman. That's good for me.

The Chair: We'll now go to the Alliance. I'm not sure whether it's Brian or Andy who is going to take up the challenge.

Mr. Andy Burton: Thank you, Mr. Chair.

I'd like to get back to the ACANs and sole-source. I'm still a little confused. Can you tell me what percentage of total contracting is put out on ACANs? I think you did, and I just want to clarify that. Was it 19%?

Ms. Jane Cochran: About that.

Mr. Andy Burton: Then what percentage would be sole-source?

Ms. Jane Cochran: It's about the same.

Mr. Andy Burton: Is it 20% of ACANs or 20% of total contracting?

Ms. Jane Cochran: Total contracting.

Mr. Andy Burton: It's 20% and 20%. So 60% is open bidding, 20% is ACANs, and 20% is sole-source. Is that in number of contracts or dollar value?

Ms. Jane Cochran: Both, with one exception, which I think was in 1998. We set aside the NATO flight training program and showed it both with and without it. That is such a large program that it skews the numbers considerably.

• 1200

We will in 2000, as well, have to look at our figures again, because very large competitive contracts were awarded in this year. In order to show with and without, to understand what the overall pattern is, we'll have to make sure we're explicit about that. So if you looked at our contracting activity report, we'd show those things broken out.

Mr. Andy Burton: Okay.

When you put a contract out on ACAN, through MERX I gather, how often do you actually get a response that would initiate a change of award?

Ms. Jane Cochran: We don't have actual figures for that.

Mr. Andy Burton: Well, would it be—

Ms. Jane Cochran: We've asked departments—

Mr. Andy Burton: —1%, 20%? Do you have a ballpark number? Because I think that's fairly significant. What I'm getting at is, when it goes on ACAN, is it a slam dunk, or is there really a response?

Ms. Jane Cochran: From what we understand—and we have no numbers, so to give you a number would misrepresent the knowledge we have of the situation—there don't seem to be an awful lot of challenges. And when we discussed these—

Mr. Andy Burton: Not a lot of challenges?

Ms. Jane Cochran: No, they're very few.

Mr. Andy Burton: I wonder if there isn't a reason for that. Have you—

Ms. Jane Cochran: That's part of it. In having discussions with the Auditor General about it, one of the things we were concerned about was the very use of the word “challenge”—did that in fact inhibit companies in some way, just because of language and semantics? That is why we've changed our language. If you look at the policy that's now in place, after last fall, it talks about supplier capabilities. So in fact it's not a question of a supplier coming in and challenging a requirement, it's them stating their interest. And I think that's an important nuance in making suppliers feel welcome to come in.

Mr. Andy Burton: Have you noticed any significant change in response? Or are you not tracking that?

Ms. Jane Cochran: In the fall we'll be doing, in essence, three things. The policy went into effect in December. We have told departments, through our contracting policy notice, which is how we communicate these things, as well as in committees, we will be coming out in the fall and asking them to show us how they've set up the procedures for giving that independent review of the statements of requirements when they come in. We'll be looking at the question of patterns and change from their perspective, because there should be a sufficiently small number that they can do that well.

Mr. Andy Burton: It seems to me that's a fairly significant area.

Ms. Jane Cochran: Yes.

Mr. Andy Burton: If 20% of your contracts are basically “here it is”, I think that's something of interest that could bear some improvement.

Ms. Jane Cochran: It could also mean that the tool's being used properly too. And you're correct that we have to understand the root cause.

Mr. Andy Burton: I've got a small statement here, a comment, and I think I've got time. I'm really concerned over the whole contracting procedure, and I've put forward a motion to this group, which I intend to amend today, and I hope they will support it. But it's up to this group to decide one way or another about the possibility of a subcommittee to look at contracting and the whole process and see if there aren't some improvements that could or should be made. What would your response be to that? Would you be comfortable with that? Do you feel it's necessary? Would you support that initiative?

Mr. Richard Neville: Mr. Chairman, obviously, we respond to decisions from parliamentary committees. Government looks at those particular recommendations and makes a decision. So I think the answer to that question would be that what this parliamentary committee recommends will be something we would look at and consider accordingly.

The Chair: Okay. Thank you.

Mr. Szabo.

Mr. Paul Szabo: Mr. Chair, I think it is probably useful to talk about the contracting issue. How many people are involved in the contracting process on behalf of the Government of Canada?

Ms. Jane Cochran: I think directly there are about 3,500. But indirectly, it could be upwards of 20,000.

Mr. Paul Szabo: And what experience or expertise do these people have, generally, let's say at the management level, or what people would understand to be supervisory or management level?

Ms. Jane Cochran: It varies by organization. In Public Works and Government Services it's a highly professionalized organization, because they're all specialists.

Mr. Paul Szabo: Okay. What kind of educational or professional background might they have as a general prerequisite for being involved?

Ms. Jane Cochran: There is no university requirement in all of our positions. But they may have, through extensive experience, acquired the knowledge they need in order to be a senior purchasing person.

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Mr. Richard Neville: If I could add, there is a Purchasing Management Association of Canada, and an international one as well. A significant number of purchasing agents have had courses through the association.

Mr. Paul Szabo: Okay.

The House of Commons has looked at contracting and related areas a number of times I'm aware of since even the 35th, 36th Parliament. Have there been any major changes in the management practices of the government with regard to purchasing as a consequence of those studies? What changes have we made in the last five to ten years?

Ms. Jane Cochran: There have been a lot of changes in fact. We've lowered the threshold on non-competitive contracts as a result of those studies. Contracts Canada was established as a result of those studies. We have included a requirement in the departmental performance reports, where the contracting function represents an important activity in how that department does its work, that they include that. I think we had 12 last year, which cover about 80% of the contracting dollars awarded each year.

There have been increased delegations of authority in two departments in order to improve some of the efficiencies—that's very small scale. We've done things like investing effort to create best practices, so we get better information-sharing and knowledge across the system. We're beginning to develop a larger professional development program. We've done our first year of full-time work on that initiative, and we're proceeding to engage departments on that.

Mr. Paul Szabo: It's an evolutionary process—continue to respond.

Ms. Jane Cochran: Yes.

Mr. Paul Szabo: Of all the changes made, how many have been in response to problems? Do you have an example of what kind of problem has come up that had to be responded to? How long does it take to respond?

Ms. Jane Cochran: We spend a lot time working with the Auditor General, and the work on ACANs is reflective of some of the issues and concerns that were raised in the professional services contracting report and in the subsequent report on ACANs.

It's fair to say the advice comes from a broad spectrum of sources. We learn from other government practices, we learn from private sector practice, and we learn from problems.

Mr. Paul Szabo: In addition to the Auditor General, is there an internal audit function?

Ms. Jane Cochran: Yes.

Mr. Paul Szabo: What has been the experience of the department with regard to its internal audit report?

Ms. Jane Cochran: Departments have their own internal audit groups, and they post on the website. We get copies of their reports. We work with departments to identify areas where, for example, there is a need to deal with the issue of professional development and training.

Mr. Paul Szabo: Okay.

Is it fair to say that Treasury Board, functioning in concert with the departments it interacts with, has an ongoing responsibility to review its practices and pursue best practices, and that it's satisfied that it gets not just a periodic but an ongoing review? Would it be better described as an ongoing process as opposed to a periodic review?

Ms. Jane Cochran: Very much so. Our engagement with departments is ongoing. We have what we call the Treasury Board Advisory Committee on Contracts. Basically, it gets the contracting group and the key people across the government system together every second month to identify issues of common interest.

Mr. Paul Szabo: Other than the Auditor General, are there any other third-party organizations, groups, etc., that have made a commentary on the government practices with regard to contracting or procurement?

Mr. Richard Neville: If I could, Mr. Chairman, there was—

The Chair: You have a minute and a half.

Mr. Richard Neville: There was a third-party group dealing with the IT community, if my memory serves me well, which raised concerns with respect to contracting, specifically IT contracting. That, I think, has been looked at and addressed. But really the third party would be, to me, mainly the Auditor General, if you want to use that entity as a third party, or specific groups, those that have concerns by community, as an example, IT. But we haven't seen more than that in terms of general, across-the-board, supplier-based reports.

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Mr. Paul Szabo: I guess, finally, can you tell the committee whether there are any conditions now that exist that you consider to be outstanding challenges or maybe opportunities in regard to contracting—the issue Mr. Burton has raised—that we should be aware of, that you're working on now or you intend to be working on because they represent, I guess, the next...?

Mr. Richard Neville: Well, there are two always in the back of my mind over the last few years—maybe three, if I could. One would be ACANs. It is obviously a hot issue. We have put a new policy out, and I trust that will work its way through the system, and it will do the evaluation. That policy is in play as of December. ACANs would be one, for sure.

Secondly, professionalism within the community. We've taken the initiative this past year to allocate specific resources to improve the capability and the professionalism. There's a process in play to move that forward.

Third is, just as I raised earlier, the IT procurement. Again, we're looking at trying to deal specifically with that community to try to improve their procurement requirements.

I think those would be the three main areas.

Mr. Paul Szabo: Okay. Thank you for the crisp answer.

The Chair: Mario, do you have any questions?

Bev?

Mrs. Bev Desjarlais: Is there one specific contract for government information going out throughout the country, or does each department handle their own contracts? Specifically, say, if the Department of Transport had some little info guide or something they wanted to send around, and they're sending it through some communications or courier service, is there a particular contract that they would have, or is there an overall one that the government has?

Mr. Richard Neville: It all depends on the types of items they're looking for. Some are government-wide, what we call standing offers. Basically Public Works and Government Services Canada does go across the country, determines what the needs are for a specific item, and then contracts on behalf of government, and then departments just go right up against the standing offer. That's one type of contract.

Then you have individual standing offers that are set up for a department only, just for that department, like transport. Then you have general contracting and the delegation for goods; anything over $25,000 is strictly with Public Works and Government Services. If it's for services, it's depending on a different delegation based on Treasury Board decisions.

Mrs. Bev Desjarlais: Okay.

I don't know if you'll know this or not. Say the things that come out from the government on the Canada Pension Plan—we all get these little info things sent to our offices—is that under a major—

Mr. Richard Neville: No, no. That particular one would be an HRDC request to Public Works and Government Services for a specific buy. There is a communications aspect to that, and we let that through communications. Basically it would be between HRDC and PWGSC.

Mrs. Bev Desjarlais: Has there ever been any consideration that you're aware of, of different government infrastructure programs that happen through different departments, whether it be Western Economic Diversification, ACOA—I think very little goes through Transport any more to build roads or anything—or other departments where money comes from for infrastructure? Are you aware whether there's ever been a consideration to have, say, an infrastructure department as such that looks after the infrastructure, with everything going through there rather than sort of funnelled through a number of different agencies?

Mr. Richard Neville: I'm not really aware of that kind of a discussion.

Mrs. Bev Desjarlais: Whether it's ever come up?

Mr. Richard Neville: It's really out of my realm.

Mrs. Bev Desjarlais: Okay. That's fine.

Mr. Richard Neville: I'll have to pass on that, Mr. Chairman.

Mrs. Bev Desjarlais: Okay. Thank you.

The Vice-Chair (Mr. Marcel Proulx): Are you done, Bev?

Mrs. Bev Desjarlais: Yes.

The Vice-Chair (Mr. Marcel Proulx): Larry.

[Translation]

Mr. Larry Bagnell: Thank you, Mr. Chairman.

[English]

I have four questions. I'll just ask them all, so maybe you could write them down and then figure out the time.

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First of all on that, based on a recent answer to Mr. Szabo, it seems like contracting is one of the most studied things in the government. I wonder if it's possible if you could just give us a brief list of all the studying of it that's been done, because I wouldn't want to personally commit further resources to something that's been elaborately studied. I'd just like to know what's been done.

Secondly, the parliamentary secretary was asking about a rural constituent, and it reminded me of one I had in an area I know nothing about. It was a person, once again in a very remote community, who has a flight service, and apparently the service was being provided by helicopters, as opposed to fixed-wing aircraft, from a major centre. The person was told that the reason they couldn't be the provider was that the catalogue was out for this year, and they couldn't be in the catalogue for another year until it was reprinted.

I don't know anything about this. I just want to know if that's the way it works. Why couldn't you have a one-sheet addendum to the catalogue if it was going to save the government two or three times the cost of the...? Maybe there's more to it.

My third question is this. I'm just curious as to what the progress of the government is on general overall management of government, in getting management by measurable results as opposed to by activity—as opposed to the number of clients who walk in the door at HRDC or the number of programs they're offering, as opposed to how much the unemployment rate is down in Canada, or how many jobs are created; that type of change. I know you're working on that, but I'm just curious as to the progress.

My final one is a second question on contracting, but I didn't want to confuse it with the first one. In the private sector, the movement is towards less competition in the sense that there's some benefit to having longer-term relationships with contractors. By doing that you can set up electronic systems, you can have a better working relationship with your contractors so that they're willing to take the hits, and they can also invest in more equipment, in electronic stuff, knowing that they'll have contracts over a number of years.

Have you moved in that direction, in similar fashion to the private sector? Thank you.

Mr. Richard Neville: Okay, I'll try to handle the first three, and I'll ask my colleague to handle the fourth.

In terms of studies, there have been a number of studies by parliamentary committees, whether it be SCONDVA or whether it be the public accounts committee—

Mr. Larry Bagnell: Sorry. I didn't need an answer now. I was just wondering if you could put that on a piece of paper for me.

Mr. Richard Neville: Oh, sure. Yes, we can. But to answer your question quickly, there has been a number of studies. You were right. It's probably one of the most studied functions.

In terms of the second question, usually one determines the needs of the departments at the beginning of the year or at the end of a fiscal year for the upcoming year. In the case that you've put forward, we usually do go out with a catalogue that shows what's available, and departments can in fact pick from the catalogue. There's a number of catalogues, whether it be for machinery, whether it be for tools, or whether it be for whatever.

The question there is if there is something that comes up during the year, do you have to wait until the end of the year? Normally, if it's a major item, amendments are made, but as a general rule it's more efficient to wait until you do the next round of needs requirements and then put it into the next catalogue. It's just a question of efficiency.

On your third question, yes, there's been a lot of progress done on the results of performance measurement. On that, again, the minister tabled recently results for Canadians, and as well, the “Managing for Results” document focuses on a number of key results statements. We've come a long way from where we were two years ago. I still think there's work to be done, but we have moved the yardsticks forward, and we'll continue to do so.

If you care to refer to the document, “Managing for Results”, you'll see the specific indicators that have been put forward for government for the upcoming year.

Ms. Jane Cochran: I guess on the last question, with respect to long-term supply arrangements, it is one of the tools that we're introducing in our tool kit. I think probably the highest-profile contract that has been done that way is the long-term support for the search and rescue helicopters that IMP Group Ltd. was awarded last fall.

In essence what it does is set performance targets for the contractor in it. If IMP fully meets all of those performance targets on an ongoing basis, then they could have a contract up to 20 years, but there are a series of gates and off-ramps tied to their actual contractual performance and meeting those targets, backed up by financial disciplines.

So it is an area that we are looking at, and we're looking at developing best practices in that area.

The Vice-Chair (Mr. Marcel Proulx): Thank you.

Andy or Brian.

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Mr. Andy Burton: Thank you. I have a couple of questions.

When we met with the Public Works people, they referred a number of questions back to us, saying Treasury Board could probably better answer those. One of them was that in the 1999 Auditor General's report, I believe it was, he stated that only 11% of 50 contracts randomly selected from 552 met the conditions for sole sourcing; 89% should have been put out to public tender. This is approximately $1 billion in sole sourcing. What are we doing now to ensure that proper procedures and best value for dollar have been achieved?

Ms. Jane Cochran: In that instance, this partly centres on the issue of whether or not an ACAN is viewed as competitive. Because the contracting policy is very clear that we categorize ACANs as competitive, that's the standard we expect departments to operate under.

The Auditor General, in reaching that conclusion, did not use that as the standard. There is a question around what is the appropriate standard and meets government-approved policy, the standard that should be used in reaching that conclusion.

That being said, of course we talk to the Auditor General. We want to understand what the underlying issues are with respect to that. That was why we in fact invested as much effort in making sure the professional development program is brought to fruition, so there is no ambiguity around some of those things and that judgment and discretion gets....

Mr. Andy Burton: Obviously you're saying there was some confusion on the Auditor General's part between yourself and him. Is that resolved now so there's no longer confusion, no longer ambiguity? Is it clear now what comes under sole-source—

Mr. Richard Neville: We've had this discussion in the public accounts committee and other parliamentary committees. I think we've agreed to disagree. We treat ACANs as competitive, and I believe the Office of the Auditor General and the Auditor General himself are of the view that ACANs should not be counted as being competitive.

Mr. Andy Burton: What's his rationale for that? I suppose we have to ask him rather than you?

Mr. Richard Neville: I defer that question to the Office of the Auditor General.

Mr. Andy Burton: Let me reverse the question. Why are you hanging your hats on it as being competitive?

Mr. Richard Neville: I thought we went through that a few moments ago.

Mr. Andy Burton: I think we did, but let me ask about it again.

Mr. Richard Neville: We certainly are of the view that ACANs do allow the supplier community an opportunity to voice their views as to whether they are competent and can carry out those requirements. If they are, then we go into a full RFP and a full procurement process. If they don't declare, and they don't show an interest, then we treat that as competitive. We respond to the marketplace.

Mr. Andy Burton: I think I have something else here. It seems to me that when we had Public Works here we were asking for a breakdown of that, but I think possibly you've answered this, so I'll leave it, Mr. Chairman. That's it for now. Thank you.

The Chair: Thanks.

If you don't have any further questions, we have some work of the committee that we could probably expedite.

Sorry, Claude. You're so far down there. Welcome to the committee, and thanks for coming.

[Translation]

Mr. Claude Drouin (Beauce, Lib.): Thank you, Mr. Chairman.

I have a bit of a lump in my throat today, because I had to leave my first love to be here, for this discussion with the Treasury Board people. Thank you for being here.

I'd like to check with you a few points which were raised before. First of all, there is something I am very curious about. There have been, in the past, reports by the Auditor General according to which some assets were disappearing and could not be traced. I am sure you have taken measures to deal with that problem. Do you have any information about this? Is the situation getting better and better? Did you indeed take some concrete steps to ensure that the various departments have in place some measures to ensure that goods that have been paid for with the taxpayers' money remain the property of the government?

Mr. Richard Neville: Obviously, assets management is always one of our concerns. It's part of our responsibilities, since our role includes assets management and financial management of the government, as a whole. We look at the information the departments give us regarding losses. We follow up with those departments where we feel there is a real problem because of the large number of losses. However, it's rather up to the departments to ensure that they manage their own assets properly. We expect managers, within each department, to take whatever measures are required to avoid such a problem in the long term.

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I think it's rather a minor problem, given the total value of the government's assets. Obviously, you have to put that in context. We do have a responsibility in this regard, but we expect departments to take any measure required to correct such a problem. Our own responsibility is to follow up.

Mr. Claude Drouin: I have a rather hypothetical question. If senior officials were held accountable, couldn't we get better results, not only in this area, but also in the overall management of departments? If people were held accountable of what they do—by whom I don't know, I'm just talking through my hat—by a committee or by members of Parliament, wouldn't it be a way to ensure that things are managed efficiently and that the money is used properly?

Mr. Richard Neville: Certainly, accountability starts at the level of the managers in charge of each responsibility centre and takes on more and more importance at each level of the hierarchy, up to the deputy minister. And of course, each department has to make presentations before parliamentary committees such as yours. I believe this is a way to ensure accountability before Parliament, but there are also the financial statements and the Public Accounts which are published and tabled before Parliament. It's also through these documents that we can see, in a more concrete way, the results achieved by government.

Mr. Claude Drouin: If a department comes before a Committee to make presentations in support of its Estimates or the way it manages its programs, and if it can be demonstrated, beyond any doubt, that the affairs of that department are badly managed, are there any consequences, or does that department just get a slap on the hand and is told not to come back next year with such bad results, otherwise, there will be sanctions? If someone is obviously not capable to manage—it can happen—what measures can be taken to deal with the problem?

Mr. Richard Neville: Internal measures are taken at the management level by the clerk and the deputy minister involved. Each year, there is a performance report. As well, the clerk and each deputy minister prepare a report on responsibilities and objectives. In this context, I would expect that if one year, there are a few shortcomings, the clerk and the deputy minister concerned would ensure they are addressed in the following year.

Mr. Claude Drouin: One last question, Mr. Chairman.

It has to do with the statutes you mentioned in your presentation. You are responsible for coordinating the Official Languages Act. Do you think it's going in the right direction? Have things really improved as far as official languages are concerned? I am sure that there is still a lot to do. Have objectives been established? What do you do to ensure that Canadians, wherever they live in Canada, can be served by the government in the language of their choice?

Mr. Richard Neville: Mr. Chairman, I'm going to ask my colleague, Glynnis French, to answer this question.

[English]

Ms. Glynnis French: Yes, we certainly are interested in improving in all ways the use of official languages in the federal public service. The President of the Treasury Board has herself outlined this as one of her key priorities over the next period.

We are bringing out new policies and new approaches to specifically attempt to ensure that the use of official languages and the ability to use official languages is enhanced in all manner of ways. We want to ensure both the right of the employees to work in the official language of their choice and the capacity of individual Canadians, including those who are within a minority language capacity in different regions of the country...that they are served and they are able to obtain government services in the language of their choice.

[Translation]

Mr. Claude Drouin: Do I still have some time, Mr. Chairman?

[English]

The Chair: Yes.

[Translation]

Mr. Claude Drouin: Do we still give a bonus to bilingual employees in the Public Service? If it's the case, do we have ways to really check whether those employees are, in fact, bilingual and can serve Canadians in either official language?

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[English]

Ms. Glynnis French: Yes, positions in the federal public service are ranked as to the language capacity that is required for the position; some, of course, are unilingual, others have an A, B or C level of language capacity in oral interaction, in writing, and in reading.

An individual who attempts to work within that position must meet the language capacity of the position, and there are certain periods of time to obtain the language capacity. I'm not an expert in official languages, so I can't give you the exact timeframes, but indeed there is a requirement. Certainly, for the executive category of the public service, practically all executive positions in the public service today require a level of bilingualism.

[Translation]

Mr. Claude Drouin: Thank you, Mr. Chairman.

[English]

The Chair: All right, there are no further questions from the committee.

We'll thank our guests and suspend for five minutes before we go into committee of the whole to discuss the future work plan.

Mr. Neville, thank you—

Mr. Richard Neville: If I could, there's one answer we could probably provide that will save the committee some time, if we could take a moment more of the committee's precious time.

Glynnis.

Ms. Glynnis French: This was a question that we noted in the transcript from Mrs. Bev Desjarlais about the numbers of public servants in different regions of the country. If you would like an answer to that question, I could provide it at this time.

I did in fact bring our statistics, so if that question is still one you want answered—

The Chair: How long would it take you?

Ms. Glynnis French: It would only take a minute.

The Chair: Then you have a minute.

Mr. Marcel Proulx: Mrs. Desjarlais is out of the room momentarily.

Mr. Richard Neville: It would be in the record.

The Chair: Go ahead.

Ms. Glynnis French: She asked the question about whether or not there were about 50% of employees in the federal public service who worked in the national capital region. Indeed, it is in the national capital region where about 38.8% or 40% of federal public servants are located.

If I could quickly go through some other statistics: Newfoundland has 2.2%; Prince Edward Island, 1%; Nova Scotia, 5%; New Brunswick, 3.7%; Quebec, minus the NCR, 12.4%; Quebec, national capital region, 10.7%; national capital region, Ontario, 28.1%; Ontario, less the national capital region, 13%; Manitoba, 4%; Saskatchewan, 2.7%; Alberta, 5.5%; British Columbia, 9.4%; Yukon, 0.03%; Northwest Territories, 0.04%; for Nunavut the numbers are so small that they're not showing up in the statistics; and outside Canada, 0.09%. That's on a total of 146,688, which are the number of employees the Treasury Board has jurisdiction over as the employer.

The Chair: Again, thank you very much, Mr. Neville, Ms. Velenosi, Ms. French, and Ms. Cochran. We appreciate your input here today, and I'm sure we'll be in contact with you in the future.

Mr. Richard Neville: Thank you, Mr. Chair. It was a pleasure to be here.

The Chair: We will suspend for a couple of minutes to clear the room for a business meeting and get something to eat.

[Proceedings continue in camera]