:
Good afternoon, ladies and gentlemen. Welcome to the 34th meeting of the Standing Committee on Government Operations and Estimates.
We're very pleased today to welcome the President of the Treasury Board, Mr. Tony Clement, to speak to us today about the supplementary estimates (C) as well as the main estimates under Treasury Board.
With him today, I understand, is Michelle d'Auray, secretary of the Treasury Board of Canada; Sally Thornton, executive director of expenditure operations and estimates; and Christine Walker, assistant secretary and chief financial officer.
You seem very well served and your department seems very well represented today, Mr. President.
You have the floor, sir, for as long as you like.
:
Thank you very much, Mr. Chair and members of the committee. Thank you for inviting me to speak to you today.
[Translation]
Today, I would like to focus on the supplementary estimates (C) 2011-12 and the 2012-13 Main Estimates for the Government of Canada.
I will also say a few words about the estimates process.
[English]
Let me begin with supplementary estimates (C) 2011-12.
Obviously this is more evidence, Mr. Chair, that our government continues to put Canada's financial house in order. Indeed, in an uncertain global economy, we are sticking with our plan, our low-tax plan for jobs and growth, a plan that we believe has worked and has served Canadians well.
The supplementary estimates (C) 2011-12 are certainly aligned with our commitment to restrain the growth in government spending. They support the government's request for $1.2 billion in funding for 54 organizations through an appropriation act. This represents an increase of only 1.3% over the 2011-12 main estimates.
As members know, supplementary estimates are part of the regular parliamentary approval process to ensure that planned government initiatives receive the necessary funding to move forward and meet the needs of Canadians. These supplementary estimates (C) 2011-12 provide information to Parliament to approve spending plans that reflect elements of new programs set out by the government in Budget 2011 and in previous budgets. I'm sure we'll get a question or two on those.
Let me just speak briefly on 2012-13 main estimates.
[Translation]
Mr. Chair, in addition to the supplementary estimates (C) 2011-12, I would like to discuss the 2012-13 Main Estimates.
As I mentioned, the government's top priority continues to be economic growth and job creation.
[English]
Indeed our commitment to this goal is also reflected in the 2012-13 main estimates and the responsible spending plans they set out.
These main estimates provide details on $251.9 billion in planned budgetary expenditures for the fiscal year 2012-13, which is essentially the same as, in other words, about a 0.4% increase from last year's main estimates of $250.8 billion.
I can tell you, Mr. Chair, that these expenditures are in line with decisions from Budget 2011 and previous budgets. They demonstrate our ongoing approach to spending restraint by showing the government operating within its means.
An appropriation bill for 2012-13 interim supply will be voted on by Parliament this evening—I hope that is not a shock to you—and an appropriation bill for full supply will be introduced for a vote in June. As you probably are aware, interim supply grants departments the required authority to make expenditures from April 1, the beginning of the new fiscal year, until the end of June, providing parliamentarians time to deliberate and vote on full supply.
[Translation]
Mr. Chair, let me turn now to the estimates process itself.
As the committee is fully aware, after new initiatives are announced in the budget, departments prepare detailed implementation plans, which must be approved by Treasury Board before the initiatives can be included in the estimates.
[English]
The proximity of the tabling of the main estimates and the budget does not provide sufficient time for new budget initiatives to be included in the main estimates for March 1.
Another part of the estimates examination process is the departmental reports on plans and priorities. They support the parliamentary committees' reviews of the main estimates by providing additional information by program activities to parliamentarians before they vote on full supply.
This year, the reports on plans and priorities will be tabled a little later than usual. Departments and agencies were given additional time to prepare their reports, in recognition of the time and effort required to complete the strategic and operating reviews under the deficit reduction action plan. But as per the normal process, these RPPs will support the main estimates; that is to say, they are connected to whatever is found in the main estimates. That issue has been a matter of public commentary, and I wanted to explain why we are following that approach and why that is consistent and required, if one looks at the Standing Orders.
If you're looking for the anticipated savings, they will be found in the process that is Budget 2012 and the Budget Implementation Act that flows from Budget 2012.
[Translation]
The broader issue, of course, is the logistics of the estimates process. That's why I am pleased that this committee is undertaking a review of the estimates process.
This process is rooted in both legislation and parliamentary tradition. While there have been changes to the presentation of estimates over time, there have been only a few changes to their fundamental form and content, and these were largely as a result of recommendations from parliamentary committees.
[English]
In this respect, I'm sure members have received a copy of my letter to the chair of this committee. It sets out a number of questions for your consideration during the course of your study of the processes relating to budget timing and whatnot. One of these questions pertains specifically to the timing of the main estimates and the budget. I'm looking forward to the conclusion of your study and the recommendations on the subject the committee will make in its report.
Mr. Chair, thank you. I'll be more than happy to take your questions on supplementary estimates (C) and the main estimates, which are before you.
Thank you.
Mr. Minister, thank you for being here today.
With the review of the estimates process in mind, I cannot help but point out that glaring problems exist, such as those that came to light with respect to the Border Infrastructure Fund. A few million dollars had actually been allocated to the G8 Summit. You will recall the few discussions we had on the matter. I hope that main estimates and supplementary estimates going forward will be clearer and more specific, so that we are able to verify where the money was really spent.
I am not sure whether you can give us any insight into this, but members of the public service have been feeling a lot of uncertainty in the wake of the strategic reviews and the upcoming 5% and 10% cutbacks. We have heard that nearly 30,000 public service jobs could disappear. Yesterday, you said that you were going to respect collective agreements. I hope so. The government should respect the contracts it signs; that is the least it can do. That decision means, then, that those employees whose jobs are going to be cut will receive a certain amount of severance pay.
How do you think public services provided to Canadians will be affected by the elimination of 30,000 public servants? We aren't talking peanuts, that is a big number. The public service could lose a tremendous number of people.
:
I can say a few words on that. Obviously, the budget for 2012 is the result of many decisions, and the answers to those questions are important, as is the action plan needed to achieve a clear and balanced budget.
At the same time, however, I must tell you that a program is in place so we can have discussions with public servants to decide whether programs will be affected, and their suggestions are taken into account. There is such a process already.
[English]
I can tell you, Mr. Boulerice, that we have a number of things already in place, such as the collective agreement. There's something called workforce adjustment, which has been in place, I believe, since 1999, after the last major round of consolidation that took place during the Martin years—the Chrétien-Martin years, I suppose.
We are aware of those demands, and we will be in a position to have some clarity once the budget and the budget implementation acts are in place.
:
Thank you, Mr. Minister.
We aren't talking about a minor reorganization here, simply shuffling around everyone's role. We are talking about tens of thousands of jobs. Thirty thousand people could disappear from the public sector that delivers public services to Canadians and Quebeckers.
How can you assure us that the work will still be done, if these people just disappear overnight? Who is going to do the work in their place?
I want to tell you about something that has happened at the provincial level. Time and time again, we have seen governments lay off thousands of civil servants, workers who were responsible for delivering services. Then governments realized that someone had to do the work, so what did they do? They hired consultants. Too many times, we have seen former public servants return to the public service as consultants doing the exact same job. That's what happened with nurses in Quebec.
The size of the public service shrinks, but not the costs, because someone still has to be paid to do the work.
Thank you, Minister and officials, for being with us this afternoon, and not only speaking to the estimates but helping with our wider study of this process as well.
I have a couple of questions that deal with the estimates. I think it's perhaps fair to say that they're higher-level, process-type questions.
First of all, I'm curious to know about the impact on the estimates process, particularly with programs that wind down, programs that may sunset, and money and resources that are reprofiled.
Could you speak to the impact of those particular items on the estimates process, and our understanding of the process as well?
:
Sure. Let me take a stab at this one.
When you look through the main estimates, to give you one example, you'll note there are some examples of significant reduction in spending in certain departments compared to the previous year. That's probably a pretty good signal that there's been a sunset or a wind-down of some particular program.
We've had a lot of that in the last couple of years, with the wind-down on Canada's economic action plan as a good example. As you recall, in Budget 2009 there were extensive new programs, stimulus measures, but there was a specific date saying those will be wound down two years hence. That's where you start to see that in these estimates documents. If these programs were completed by March 31, 2011, it's after that period, so you're starting to see now where these programs drop off.
A lot of these were infrastructure projects. They were large infrastructure projects. You can clearly see—such as for FedDev, the Federal Economic Development Agency for Southern Ontario, the clean energy fund, CFI, which is the Canada Foundation for Innovation—where the evidence of that drops off. Because the specific stimulus measures are no longer active, they are dropping off our estimates sheet.
:
Thank you very much, Mr. Chair.
I too would like to welcome you here, Mr. Minister, and your officials as well.
As you observed in your opening remarks, our committee has undertaken a study on the estimates process, not only for us to understand the process but also to identify whether there might be some improvements that we would want to recommend. I think it would be fair to say that we readily welcome the opportunity to meet with you and ministers and officials from other departments to do the work we need to do in looking at the main and the supplementary estimates.
We also have started a study, previous to the estimates study, which is on Shared Services Canada. I know that it's a fairly young organization, or is still in the process of being formed, but this is the first time that Shared Services Canada has appeared in the main estimates. Could you briefly explain, from your perspective, whether these are new funds or where the funding is coming from, and give us a better understanding of that entity?
Basically what we did was transfer funds from 43 different departments to Shared Services Canada's reference level, so that they have a reference level of about $1.5 billion. That came from other branches of government, various agencies and departments. The reason for this is that we're consolidating at Shared Services Canada. We'll have a consolidated e-mail service, data centre, and network services for federal departments and agencies.
As you may recall, Minister Ambrose and I made the announcement back in August 2011. They're just starting to ramp up, but the idea is that basically through consolidation we can deliver better IT services, ultimately to the Canadian public, at a more responsible cost to the taxpayers.
It's a question of how you interpret the information. For example, the question on personnel costs that was asked earlier is shown in the PBO's report as though there were no components to it, whereas when we look at the numbers, we unpack them and see them from estimate to estimate and look at the purpose.
We are working with the Parliamentary Budget Officer, and wherever we see differences we will get in touch. We try, both of us, from report to report to improve the information.
One of the elements that the PBO is using increasingly is the quarterly financial reports that departments are putting out. That gives even more information on what I would consider to be in-year expenditures. Estimates, whether supplementary or mains, are all about projected or planned expenditures. When we look at what the actuals are, the in-year will give you some sense of the areas in which the actual expenditures occur.
We are working with the Parliamentary Budget Officer on both the explanations that are given in his reports for estimates processes, the planned as well as.... He does a review of the quarterly financial reports, and we are working with departments to ensure that there is as much information as possible, so that our interpretations, or at least the alignment of the numbers, is as close as possible.
We may differ on the interpretations, but that then becomes an issue of interpretation rather than one of actual numbers.
:
Excellent. I think the sooner we can implement these regulatory reviews the better.
I was in Portland with Mr. Kennedy, who was Canada's representative working with President Obama's administration. At the conference I was at they likened the perimeter to a set of suspenders and the 49th to a belt. We're thinning out the belt and thickening the suspenders to try to increase the flow of goods and services. So it's very important for our economy.
One other area of significance is trying to understand the whole parliamentary budget review process. My colleague, Mike Wallace, and I both come from a background in local government. We've been trying, and Mike's been doing a fantastic job, to bring forward some ideas. And it's been really encouraging, as all of us are working together as a committee to look at the estimates cycle and the budget cycle.
In your letter, Mr. Minister, you referred to the main estimates and the timing of the budget. To improve the system, would you see as a possibility implementing the budget later in the year, as was recommended by some who have come to the committee?
:
Let me say that I'm really interested in how we time the presenting of the main estimates to this committee and therefore to Parliament, and how we coordinate that with the budget timing. I think we're all dancing around the same thing, but I'll just say it and put it on the record. It's all out of whack right now. That's the way I look at it.
If it makes you feel better—I know you're frustrated with it—it's frustrating for us too, because we're trying to deliver timely and accurate information and we've got the cart before the horse on some of this. So by the Standing Orders and by other rules that I cannot in any way resile from, here I was a few days ago presenting the main estimates, three weeks before the budget. The main estimates are a valuable tool for having the baseline, but as we're all saying, it's going to be changed by the budget in some manner or another. I think it is important for us that we get this looked at.
The supply cycle itself is in legislation. It's not just the Standing Orders, as Michelle reminded me, but it does have parliamentary procedure in it as well.
So it's a combination of things that I'm really looking forward to you looking at, and I guess I'm expressing my interest in presenting to our fellow parliamentarians and to the government some solutions. I think that would be very useful.
:
Certainly. Are you referring to supplementary estimates (C)?
Mr. Scott Armstrong: Yes.
Ms. Sally Thornton: Let me ask you to turn to page 20 in your supplementary estimates (C). You see the ministry summary for Agriculture and Agri-food. You begin by looking at the departmental votes on the left-hand side. Those are your controls.
You'll notice that vote number 1, your operating expenditures, is followed by a little “c”. What that means is that some place in this document, supplementary estimates (C), there is a change to that vote. Typically we will underline if it's a change to vote wording.
You will also notice that along with the description of the vote there is an addition of some wording that is underlined. In this instance what we're adding to that vote authority is “the provision of internal support services to other organizations”.
Now, you are going to see that change in more than 20 organizations in supplementary estimates (C). What that change reflects is an amendment to the Financial Administration Act last June that allows departments to provide internal services to other departments—finance, HR—to increase the efficiency and effectiveness of delivery of those services.
The departments did not have the mandate to recoup moneys and then spend those moneys for providing that service, so we have had to change their vote wording to ensure that they have the mandate, not just to deliver those services for another organization but to receive moneys and then reuse those moneys.
You are going to see that change in more than 20 organizations. It is also reflected in one of the annexes, when we talk about dollar votes. A number of organizations have $1 items so that they can have that change to their mandate.
That's a consistent approach to vote wording.
Another area in which you may see a “c” can be seen in item 10 or vote 10, which is their grants and contributions. In that case, there is no underlined wording: we aren't changing the terms of that vote. But you will note that we are changing the dollar amounts.
In this amount, what you will notice is that we have a transfer in—it's not in brackets, so it's a positive transfer—and we actually have two transfers of grants and contributions. Both of these can reflect back to vote 1, where you see a transfer out. That's your third column.
So transfers from an organization to another are bracketed, because money is going out; transfers in either from another vote or from another organization are not bracketed, because they're in. There's always a net balance throughout the course of the estimates.
Those transfers may be within one organization from one vote to another—because as you know, the vote is your control function and an organization can't move money between those votes without getting parliamentary approval—or it may be from one vote in an organization to a vote in another organization.
On the corresponding page, page 21, you will see some transfers in to the CFIA that also total up to the vote out.
We have the distinction.... You will also notice a number of items in the ministry summary that have an “(S)” beside them. Those are statutory items. Let me remind you that while we present statutory items in the main estimates and supplementary estimates, they are there for information purposes. The actual expenditures are predetermined by other pieces of legislation, such as the Employment Insurance Act and other acts, but they are here for information. Generally, the distribution of statutory expenditures is about two-thirds of your government-wide expenditures. Out of your $251 billion, only $90 billion are voted.
What we show, again, is your vote descriptions, your authorities to date—and these include your main and supplementary estimates, (A) and (B) in this instance—and then transfers and adjustments, which are changes that are being made through this supplementary estimates (C), and your totals to date.
That's your overview for each ministry.
Let me ask you then to flip to page 22. This is where you get your more detailed explanation of requirements to support that ministerial overview.
Your ministry summary is really what is reflected in the legislation, in the vote wording, and in the dollar amounts. Then you get more explanation provided by the department, which breaks down the specific requests and shows the voted appropriations and exactly where they're going.
For example, you can see the “Funding to support a profitable and innovative agriculture and an agri-food and agri-based...”, and which vote it is—it goes into vote 10—and the total amount.
You will also see a number of transfers. This is where you see transfers between votes. Again, this is just more detail than was provided earlier. You'll see that we're transferring money for “Internal reallocation of resources”; we're transferring money from vote 10 to vote 1. That has to be clear in the legislation, which you vote on.
:
There are some significant differences.
I served not only as the Minister of Health but also in other ministries. I also served on the Management Board of Cabinet, which is the complementary agency in the Ontario government to the Treasury Board.
There are some differences in approach of which I'm cognizant. There are certain things that I have learned from that experience that I'm trying to apply here. I think it helps me in my role as President of the Treasury Board. The only thing I would signal at this point is, to repeat what I said over the weekend and have been saying for a while now, that there are some things I think we can do—and this body is important to that process as well—to move from a culture of spending enabling to a culture of cost containing.
I think that involves two things that human beings rely on to change behaviour: one is how you're compensated and what the reward system is; the second thing is how you are overseen. There has to be accountability.
Obviously, one is more structural, which we'll have to deal with, but the other—how we oversee this—is a joint role that I have with you. I'm looking forward to making some positive changes.
Here are the questions for your staff. Again, they're all process stuff for me at this particular moment.
I'm looking at the ends of supplementary estimates (C) for this year, and then I look at the main estimates for the new fiscal year coming. At the end of supplementary estimates (C)—and I'm using the same section, so it's everything up to vote 33 and the three statutory pieces after that—the total estimates to date are $4.5 billion.
When I look at the main estimates for 2011-12, for the new fiscal year, they're at $5.8 billion. There tends to be a significant difference there. I just don't know why that is. Shouldn't the ends of the supplementary estimates (C) reflect what the total ask is that is reflected in the main estimates for this coming fiscal year?
Sally might be able to answer that question.
No, the collective agreement is one thing. The exoskeleton of Work Force Adjustment has been in place since 1999.
The Work Force Adjustment is about what you do, when there is contraction of the public service, with people who are being laid off. There's a whole structure around it.
Because we have 11,000 a year leaving because of attrition, we have openings in certain departments, whereas other departments are contracting. What we try to do is match people and their skills to openings within the public service, so that they are guaranteed a job offer, if there is one there.
Certain people may not be guaranteed a job offer, so they're in another stream, and there's training and there's counselling and all those kinds of things. That's what I was referring to, the Work Force Adjustment.
:
Thank you for joining us.
I have a somewhat more general question.
The main estimates for 2012-2013 total $251.9 billion, but the 2011-2012 spending estimates, including the main estimates and the supplementary estimates (A), (B) and (C), are $259.7 billion. That is a decrease in spending estimates of nearly $8 billion.
The 2011-2012 main estimates total $250.8 billion. Here, it’s a matter of $251.9 billion. So, the amounts are fairly close, which means that, if we really want to save $7 billion, practically no new spending should be approved by parliamentarians as part of supplementary estimates (A), (B) and (C). Otherwise, we won’t be able to reach the $8 billion in savings the minister talked about.
I know that supplementary estimates can sometime include global decreases, but in this particular case, there would need to be virtually no spending across supplementary estimates (A), (B) and (C) for the anticipated amount of money to be saved.
Is my analysis correct?
:
That's very interesting.
I think that concludes the rounds.
We will again thank our witnesses from the Treasury Board Secretariat.
Madame d'Auray, Madame Thornton, and Madame Walker, this has been very helpful and very useful. Thank you very much.
I'm going to suspend the meeting for just 30 seconds or so, and we'll reconvene in camera, if that's okay.
[Proceedings continue in camera]