REPORT OF THE COMMITTEE |
Tuesday,
June 12, 2001 |
The Standing Senate Committee on National Finance
has the honour to table its
EIGHTH REPORT
Your
Committee, to which were referred the 2001-2002 Estimates has, in obedience to
the Order of Reference of March 1, 2001, examined the said estimates and
herewith tables its second interim report.
The
2001-2002 Estimates were tabled in the Senate on 1 March 2001 and referred for
review to the National Finance Committee.
As is customary with this Committee, several meeting dates were set aside
for the review of the Estimates.
The Committee’s initial examination began on Wednesday evening, 14
March 2001 when the officials of the Treasury Board outlined and explained the
main features of the new estimates.
They also answered several questions at that time and through written
responses at a later date.
The particulars of the Interim Supply Bill were made available for the
Committee’s consideration before the end of March and an interim report (the
Committee’s Third) was submitted to the Senate on 22 March 2001.
Since that date, the Committee has continued its examination of the
Estimates.
On
the 24 April 2001, officials from the Transportation Safety Board assisted the
Committee in its examination of the expenses of the government relating to the
Swiss Air Flight 111 disaster.
On
May 29, the Committee examined the operations of the Public Service Commission
of Canada. Officials
of the Commission were able to provide insight into the issues facing the public
service at this time and were also able to offer advice on appropriate response
to a number of matters of interest to Senators.
On
May 30, the Committee heard from the honourable Lucienne Robillard, President of
the Treasury Board.
The meeting provided Senators with an opportunity to discuss both policy
issues as well as technical aspects of government expenditures listed in the
estimates. Although
much ground was covered in this meeting, the Committee intends to examine
further certain items of the Estimates at a later date and to report on all of
its work before the end of fiscal 2001-2002.
THE
HEARINGS
A. The
President of the Treasury Board
On
Wednesday, 30 May 2001, the Honourable Lucienne Robillard, President of the
Treasury Board appeared before the Committee and discussed numerous elements of
the Estimates.
In her opening remarks, Ms. Robillard outlined some significant changes
in government spending plans and highlighted several initiatives of the
government. She
noted that the current estimates total $165.2 billion, which includes an
increase of $9.1 billion over 2000-2001.
Senators were concerned about the 5.8% increase in spending in the current fiscal period. Mrs. Robillard assured the Committee that this does not signal a departure from past practices of her government. She observed that 75% of the year over year change in the Estimates relates to changes in the forecast for statutory spending. For instance, most of the $1.9 billion allocated for non-budgetary expenditures will go towards direct loans to students disbursed under the new Canada Student Financial Assistance Act that replaces the previous program delivered by the banks. Other statutory increases include $1.4 billion in direct transfers to individuals for Old Age Security, the Guaranteed Income Supplement and Allowance Payments for Employment Insurance.
A
further $3.8 billion of this year’s increase in Estimates is a result of the
government’s commitment of an additional $3.8 billion towards the Canada
Health and Social Transfer Payments to the provinces.
Several
questions dealing with the management and reform of the public service were put
to the Minister.
However, questions concerning the introduction of measures to protect
whistleblowers dominated the early part of the hearing.
Several Senators expressed a need for legislation that would provide
protection for whistleblowers.
They suggested that such legislation might contain provisions similar to
those contained in Bill S-6: The Public Service Whistleblowing Act, which this
Committee reported on 28 March 2001.
The Minister does not believe that legislative measures are needed at
this time to protect those public servants who reveal wrongdoing in the
government. However,
she does believe that the current process needs reforms.
Therefore, the government is developing a clearer statement of ethics and
values in the public service and of the process to follow in dealing with the
discovery of wrongdoing in government agencies and departments.
Ms. Robillard also
reviewed other aspects of the economy’s performance and of government economic
policy. Her
observations and statements elicited considerable discussion between the Members
of the Committee and the Minister.
In particular the Senators questioned her at length about the
significance of the Minister of Finance’s May Economic Statement and its
relationship to his October Statement and how these are represented in the Main
Estimates. For
instance, in the October update the Minister of Finance announced that the cost
of servicing the public debt would be $41.7 billion.
In the May update he announced that there could be an $800 million
reduction in the cost of that debt servicing, depending on the behaviour of
various components of the economy.
The Senators interpreted his statement to mean that the $800 million
was confirmed.
However, Treasury Board officials reminded the Committee that this amount
is not final, it is merely a forecast based on current assumptions.
The final tally will be revealed in latter (supplementary) estimates to
be tabled in the fall.
For the purpose of this report, and further discussions on the 2001-2002
Estimates, the debt service charge in the current spending period remains at
$41.7 billion.
Senators were
curious about the process by which the Canada Foundation for Sustainable
Development Technology was created.
Bill C-4, an Act to establish a foundation to fund sustainable
development technology, was given first reading on 2 February 2001.
It succeeds Bill C-46 which was introduced on 4 October 2000 but which
died on the Order Paper when the
general election was called.
However, the Foundation was created and received $100 million in funding
prior to the legislation being passed.
According to Mr. Lieff, Director, Expenditure Operations and Estimated
Division of the Treasury Board Secretariat, when C-46 died on the order paper
“the organization was created under the Canada Business Corporations Act,
because the government felt that it was such an important initiative on which to
get started that it would advance at least partial funds at the same time as
seeking parliamentary approval to put it within a parliamentary accountability
relationship with the rest of the government.”
Senators wondered if this was an appropiate way to create such agencies
and crown corporations.
They questioned whether the government should have passed the bill before
it advanced the funding. The members of the Committee condemn this process,
which creates and funds a $100 million agency without prior Parliamentary
approval.
B.
Transportation Safety Board (TSB)
David
Kinsman, Executive Director, and William Tucker, Director General of
Investigation Operations were very helpful in answering questions concerning the
costs of rescue and recovery operations whenever an aircraft crashes in Canadian
territory. Specifically,
the Committee was concerned that Canada might be obliged to bear an unfair share
of the costs of rescue and recovery operations involving international flights.
Given the country’s size and the preponderance of over flights, it
seems reasonable that Canada faces a risk of increasing costs relating to such
disasters. Under
the current international agreements, the country in which the disaster occurs
is responsible for all costs relating to the rescue and investigation of the
accident. For
instance, in the case of Swiss Air Flight 111, neither the company – Swiss
Air, nor the governments of Switzerland or the United States can be legally
compelled to contribute toward the cost of recovery and investigation.
This practice is in accordance with an international protocol established
by the International Civil Aviation Organization, or ICAO.
The ICAO is an agency of the United Nations headquartered in Montreal.
While none of these parties were required by law to assist in the
investigation and recovery efforts associated with the crash of Swiss Air
Flight, the Committee recognizes that each made significant contributions of
time and equipment that assisted the TSB in its investigation.
The
specific protocol regarding accident and incident investigation is contained in
Annex 13 to the 1944 Chicago Convention on International Civil Aviation.
Pursuant to section 26 of the convention, Annex 13 prescribes the responsibility
of the state of occurrence, that is, where the accident happened, to undertake
an investigation for safety purposes and to be responsible for its conduct.
It also contains international standards and recommended practices for
the conduct of the investigation. According
to Mr. Kinsman, since its original adoption in 1951, Annex 13 has had periodic
reviews and updates as a result of international meetings and working groups
that were formed specifically for those purposes.
One such meeting was the accident investigation prevention group meeting
held in Montreal in September of 1999.
One of the agenda items for that meeting addressed responsibilities for
mounting an investigation and provisions for the allocation of resources for
accident investigations, both of those being of direct
relevance
to the questions raised by this committee.
While discussions have taken place, no consensus exists on how to change
the responsibility for the cost of accident investigations.
C.
Public Service Commission of Canada (PSC)
Mr.
Scott Serson, President of the Public Service Commission, along with
Commissioners Michelle Chartrand and Nurjehan Mawani, answered questions and
explained various aspects of the functioning of the PSC and the cost associated
with its operations.
They also discussed several aspects of managing a modern public service
and the reforms that might be necessary at this time.
Although
the government is reviewing the possibility for reform in the public service,
Mr. Serson acknowledged that much could still be accomplished under the current
legislation. In
his opening remarks he reviewed some of the Commission’s own initiatives that
deal with problems of recruitment and retention at all levels of the public
service. He
also explained how the Commission collaborates with Departments in order to
ensure that its goals are met.
Senators expressed concern about the practice of limiting competition for federal jobs to only select areas of the country. Mr. Serson explained that the practice came about as an attempt to limit the cost of recruitment. In particular, instances exist where the criteria are relatively easily met and the number of applicants is consequently very high. As the government is bound to examine and rank each applicant, the recruitment cost would be out of line with the position being filled. He assured the Committee that this practice was used only in those instances where very large numbers of qualified applicants could be assured. He also noted that the practice is now under review.
The
Committee discussed the Commission’s mandate and role with respect to official
languages and employment equity.
The Commissioners assured the Committee that efforts are made in the
government to ensure that employees of both language groups are well represented
at all levels of the public service.
Furthermore, the PSC is involved in setting the language standards in the
public service and in providing language training.
With respect to employment equity, the PSC is responsible for sensitising
senior management to the needs of visible minorities in the recruitment process.
It is also involved in monitoring the career development programs for
visible minorities.
Senators
were concerned about the potential abandonment of the merit principal in the
selection and promotion of public servants.
In particular, they are alarmed that the creation of new federal agencies
such as Parks Canada, the Canada Food Inspection Agency and the Canada Custom
and Revenue Agency (CCRA) is reducing the ability of the Commission to monitor
the appointment of public servants.
These federal agencies have separate legislation and do not have to meet
the requirements of the Public Service Act.
In none of these separate acts is there a reference to the adoption of
the merit principle in the management of human resources.
Mr. Serson acknowledged that there are large segments of the federal
labour force that no longer fall under the traditional public service
legislation. However,
he noted that when the Canada Custom and Revenue Agency was created, the PSC was
able to obtain language in the legislation that permits it to review the
personnel operations of the Agency.
This language was added to the Act establishing the CCRA to ensure that
in practice the Agency’s recruitment and promotion policies would lead to
similar results as to what would occur if the merit principal were explicitly
applied. Although
they have begun examining the practices of the Agency, Mr. Serson feels
that insufficient time has elapse to judge the effects of the CCRA’s practices
on recruitment and promotion.
CONCLUDING
COMMENT
As
is customary, your Committee expects, at a later date, to examine in greater
detail these and other aspects of the government’s spending plans.
Respectfully submitted,
Lowell Murray
Chairman