Proceedings of the Standing Senate Committee on
National Finance
Issue 9 - Evidence
OTTAWA, Wednesday, May 6, 1998
The Standing Senate Committee on National Finance met this day at 5:30 p.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 1998 (organizational retention and compensation in the public service).
Senator Terry Stratton (Chairman) in the Chair.
[English]
The Chairman: I call the meeting to order. Welcome and thank you, ladies and gentlemen, for attending this meeting of the Standing Senate Committee on National Finance. Today we are studying retention and compensation in the federal public service. Today we have with us Mr. Daryl Bean, who is the National President of the Public Service Alliance of Canada. He is accompanied by Ms Nycole Turmel, Executive Vice-President, and by Mr. Steve Jelly, Executive Assistant to the Executive Committee.
Mr. Bean, we very much appreciate your attendance here this afternoon to discuss this issue of retention and compensation in the federal public service. I think members of the committee have all received your brief. Believe it or not, I actually read it all; it is quite comprehensive.
To give you a little background as to how this came to our committee's attention, last fall we heard about it through a Saturday morning CBC radio program, The House. It went from there on to other media events, both on television and in the newspapers.
Since that time we have held two meetings: the first on February 18, 1998, with the Honourable Marcel Massé, President of the Treasury Board; and the second on April 29, with Mr. Lawrence Strong, Chairman of the Advisory Committee on Senior Level Retention and Compensation.
Mr. Bean, please proceed with your opening statement.
Mr. Daryl T. Bean, National President, Public Service Alliance of Canada: Mr. Chairman, I would thank the committee for holding these hearings and inviting the PSAC to appear.
As you indicated, Sister Nycole Turmel and Mr. Steven Jelly are accompanying me today. Sister Turmel will share the reading of this short statement, following which we will be happy to answer any questions you may have.
Let me start by saying that discussions on compensation in the federal public sector were fairly quiet from the 1996 announcement that the Public Sector Compensation Act would expire, until the end of 1997.
During this period, the government established committees designed to review compensation for Parliament. The executive group instituted an initial pay increase for the military, and dampened any expectation that federal workers could recoup some of the income lost due to the legislative wage-control program in place from 1991 until 1997.
It would appear that this was the quiet before the storm because it has been a very busy spring on the compensation front. Between February 18 and March 27, 1998, the government made four separate announcements that increase the wages and compensation of over 75,000 federal workers.
I would draw your attention to the graphs that we have with us. The government has increased executive compensation by between 4 per cent and 19 per cent; announced that it will replace the performance pay system for the executive group with a more expensive "at risk" performance pay system; introduced legislative amendments to the Judges Act that will increase the salaries and benefits of the judiciary by at least 12 per cent over two years; increased military pay by more than 9 per cent over a two- to three-year period, depending on the classification; increased the pay of RCMP officers by almost 4 per cent with a promise of higher increases in 1999.
Despite the government's rhetoric that there will be no catch-up, that government will not countenance efforts by public service workers to recoup the income lost to inflation, the magnitude of these increases shows otherwise.
The PSAC submission to your committee addresses this point in detail, and presents what, I think, is conclusive evidence that at least part of these various wage and salary increases is for income loss during the wage-control period.
Let me make it clear at the outset that, with the exception of the increases in executive compensation at the most senior levels, performance bonuses and the lack of transparency associated with some compensation schemes, the alliance is not opposed -- and I emphasize, "not opposed" -- to increases for these groups. On the contrary, we fully understand that these workers have been subject to prolonged wage freezes. Wage increases in the 4-per-cent to 6-per-cent range are not only justifiable and desirable, but also they are, in most cases, less than what is needed to erase the real-income decline that was enforced by legislative action between 1991 and 1997.
That said, the PSAC and the overwhelming majority of our members have been appalled at the way in which many of these increases have been announced and implemented. A cursory view of our submission will show that the PSAC believes that it is impossible to fully comprehend what the government is doing in this area of compensation. The data that it has seen fit to make public is incomplete and confusing at best.
In an attempt to clear the confusion, the PSAC filed an access to information request that asked for specific information on how the executive compensation increases will be broken down between pay increases and performance pay over the next four years.
We also requested information that would either substantiate or disprove Minister Massé's statement to your committee, that wages, for the most part, for most federal public workers, and I quote, "...are either at or higher than the market rate in a great majority of categories."
Late last week, we received what could only be regarded as an utterly inadequate response to our access request. Hence no one -- not your committee, not the alliance and not the public -- has any way of knowing the full ramifications of the executive compensation package announced February 20, 1998.
Despite the lack of data, what is known is disturbing, to say the least. We know the Advisory Committee on Senior Level Retention and Compensation operated in secret and has not even provided a list of the people it consulted. We know that the advisory committee was dominated by senior corporate executives and not representative of the population.
We know the advisory committee commissioned research that recommended changes to the performance pay system that would reduce performance payment for most members of the executive group and save the government money. We know that the advisory committee ignored this expert advice, and recommended a new performance pay system that is even more generous and more expensive than the existing system.
[Translation]
Ms Nycole Turmel, Executive Vice-President, Public Service Alliance of Canada: Before dealing with the specifics of the performance pay system, we should like to raise, in summary form, the four specific concerns we cite in our submission with regard to the 4 to 19 per cent executive wage increases that were implemented on April 1 of this year.
The first point that we should like to put on the record is the astronomical increase in the starting salary at the EX-1 level.
The advisory committee came to the conclusion that there exists a wage problem at the EX-1 level as a result of the legislated wage control programs that needs to be redressed. While the PSAC is unaware of the public release of any information by the minister as to how this would be implemented, we have verifiable information that shows the government implemented it by way of a staggering 17.4 per cent increase in the minimum salary at the EX-1 level. This is yet one more example of the government rhetorically announcing that they will not countenance measures designed to override the effects of the freeze and doing just the opposite.
Second, we find the 4-19 per cent range of increase for the executive group obscene.
While the increases in the 4-6.3 per cent range for the EX-1 to EX-3 classifications are in the right ball park, the 11-19 per cent increases at the deputy minister level are assuredly not.
Third, we believe that the gap between federal workers at the highest and lowest levels of the pay spectrum has been widened to a dangerous point by the implementation of percentage increases at the executive level.
In this regard, we would remind your committee that a great number of the federal public sector workers do not make a huge amount of money for their work on behalf of the Canadian people. Thousands make less than $25,000 a year, and the working level of many classifications is still less than $30,000. Compare this to the $33,500 wage increase that deputy ministers at the highest level received on April 1 of this year, and it is easy to see how out of sync to pay system has become.
The PSAC strongly believes that percentage increases should be capped at a specific dollar amount. Otherwise, as the April 1, 1998 increase in executive compensation indicates, the gap between classes of federal workers will widen to the point where it will cause a serious downward spiral in morale from the current unacceptable level.
Fourth, we believe that the executive group should not have received an increase until the wage determination process had resulted in an increase for the unionized public service workforce.
The executive group is responsible for implementing the government's agenda when it comes to wage and salary increases for the unionized sector of the federal public service. As such, it is attempting to establish, at the government's behest, a wage increase pattern for the majority of federal workers that is in the two per cent range. From our perspective, it is more than a little unsavory for this group to receive any wage increase until the wage determination process has been completed for the bulk of the public service. It is equally clear, and important, from our perspective, that the increase for the management cadre should more or less mirror that which is provided to the rest of the public service.
While substantial in its own right, our criticism of the increases in the salaries of the executive group is more or less insignificant when compared to the outrage our members have expressed with regard to performance pay and the new system that the government is implementing on the basis of highly questionable recommendations from the Advisory Committee on Senior Level Retention and Compensation.
According to information imparted to your committee by Treasury Board President Massé on February 18, 1998, the government will spend $68 million on increases in executive compensation. The PSAC has calculated that the salary increases that were implemented on April 1, 1998 will cost the government $16.3 million. How much is being spent on performance pay and the specifics of its implementation is unclear. It is unclear, because the minister has not released the data even though we requested it under the Access to Information Act.
What is clear is that members of the executive level at the EX-1 to EX-3 level can reap the same benefit, up to 10 per cent under the advisory committee's proposed "at risk" system as they could under the old performance pay system, while employees at the EX-4 and 5, and DM-1 levels can earn a higher, 15 per cent "at risk" premium.
As with the economic increases that were announced on February 20, 1998 and implemented on April 1, 1998 the big winners in the advisory committee's compensation lottery are employees at the DM-2 and DM-3 levels who can boost their compensation with a 20 per cent "at risk" premium.
Hence, a senior deputy minister who has the potential to earn $188,000 between April 1, 1997 and March 31, 1998 can earn $223,850 during the transition year between April 1, 1998 and March 31, 1999.
The big payoff occurs in the second year when a senior deputy minister will have the potential to earn $244,200. In short, the advisory committee has set in motion a course of events that will result of the compensation for senior deputy ministers increasing by as much as 30 per cent over a two-year period.
And it does not stop there. The advisory committee has not ruled out a second look at economic increases, as its chairman told your committee last week. Moreover, the advisory committee is looking at creating a new, more senior level of deputy minister. If implemented, the new DM-4 level would earn a salary of at least $227,920 and have the potential to earn an additional $45,600 in performance pay. Where will it end?
[English]
Mr. Bean: Let me conclude this statement by, first, outlining some of the steps the PSAC believes your committee could take to ensure that compensation in the federal pubic service is determined in an open, honest, and transparent way.
Second, I will introduce a two-minute video as a reminder of what the outcome is when governments implement compensation plans behind closed doors.
The PSAC strongly believes that your hearing process is a good first step that has helped to ensure that the issue of compensation in the federal sector, and more particularly compensation for the executive group, is given a public hearing.
While we applaud your actions to date, we are convinced the issues will remain under a cloud unless you do more. As a result, we strongly urge your committee to consider a more proactive approach. Specifically, we ask that you consider: firstly, sharing the PSAC complaint with the Information Commissioner of Canada with regard to the release of documents related to the executive compensation system announced February 20, 1998, and any pay comparability data the government has to support the President of the Treasury Board's assertion that his government pays rates that "...are either at or higher than the market rates in a great majority of categories."
Second, we ask you to consider following up on Senator Kinsella's request of Lawrence Strong, and insist that your committee receive a copy of all studies commissioned by the Advisory Committee on the Senior Level Retention and Compensation and expand the request to include any data prepared, produced or commissioned by the Treasury Board to support implementation of compensation increases within the public sector.
Without this data, we fail to see how anyone can adequately assess the executive compensation package that the minister announced February 20, 1998.
Third, we recommend that the Advisory Committee on Senior Level Retention and Compensation be disbanded or reconstituted so as to make its composition more representative and its process more transparent.
Fourth, we recommend that the government establish a wage comparability body similar to the pay research bureau that was closed in 1992.
Fifth, we recommend that you continue to monitor the implementation of the executive compensation proposals and hold hearings on the "at risk" performance pay system before it is implemented.
Finally, as I promised, I would introduce our video. In a society where the vast majority of people are struggling to get by on inadequate wages and salaries, executive compensation in both the public and private sectors will always be an explosive issue.
That said, holding back information and disguising increases will not work in the long term. When we were preparing our submission to your committee, we were reminded of this fact of democratic life when we heard, on April 26, 1998, that the CTV News won the prestigious Investigative Journalism Award from the Canadian Association of Journalists for a report that the public service executive pocketed substantial bonuses.
We were reminded as well that, while the truth will win out, it often takes too much time. While CTV can be justifiably proud of its award, almost 16 months passed between the payment of bonuses on June 1, 1996, and the story making the news on September 22, 1997.
[Translation]
Senator Lavoie-Roux: To hear you address the committee in French was music to my ears. Can you tell us how many public servants have received salary increases compared to the number of executives at the deputy minister level who have received substantial increases?
Ms Turmel: If you refer to page 1, you will note that 75,000 federal workers at the executive level have received wage increases since February 20, 1998. Since 1991, approximately 130,000 PSAC members have been affected either by a wage freeze, by the government's workforce adjustment policies or by wage equity.
Senator Lavoie-Roux: You object to the substantial, to say the least, increases that members of the executive group have been awarded compared to public servants in other groups. Is that correct?
Ms Turmel: We do not object to the fact that some members of the executive group received increases in the 4 to 6 per cent range. However, we are critical of the process surrounding the review of senior level compensation. The composition of the advisory committee is not necessarily representative and no public hearings were held. Moreover, it has been difficult to get any detailed information from the committee.
We are concerned about public sector workers recouping lost income, because the government made it clear that there would be no catch-up. On the one hand, we are seeing increases ranging from 4 to 20 per cent, in addition to the possibility of earning "at risk" premiums. On the other hand, if we compare an employee earning $25,000 and one earning $125,000, it does not take much to see that there is a very substantial difference between the two when it comes down to a 5 per cent or 10 per cent increase.
Senator Lavoie-Roux: Exactly what is the meaning of the expression "at risk employee"?
Ms Turmel: This is an expression used by Treasury Board to refer to percentage bonuses paid, quite apart from the evaluation process. We refer to them simply as premiums.
Senator Lavoie-Roux: You call them "at risk" premiums?
Ms Turmel: Apparently this is the new designation.
Senator Lavoie-Roux: But why "at risk"? This has to mean something.
Ms Turmel: According to their own definition, not necessarily everyone would be entitled to receive this premium. However, as demonstrated previously, in reality virtually all executive group members receive it.
Senator Lavoie-Roux: So then, the words "at risk" are meaningless.
Ms Turmel: Those are your own words and I would tend to agree with you.
Senator Lavoie-Roux: What is the salary of the Prime Minister of Canada?
The Chairman: Approximately $150,000.
Senator Lavoie-Roux: Some deputy ministers could possibly earn upwards of $244,000. Further on in your presentation, you referred to "performance pay." How is the performance of public servants in different groups measured?
Ms Turmel: In the case of those employees whom we represent, pay scales and increases are set out in the collective agreement. Only senior level employees are entitled to performance pay.
Senator Lavoie-Roux: In the case of senior level as well as ordinary employees -- I apologize, as there are no ordinary employees if they do their job -- how is performance measured?
Ms Turmel: Performance is measured against objectives established in the job description relevant to a particular position. The duties associated with the position are determined by the supervisor to whom the employee reports.
Senator Lavoie-Roux: Generally speaking I understand what a performance bonus is, but are specific criteria used to measure an employee's performance? Does a supervisor's goodwill come into play?
[English]
Mr. Bean: That is one of the problems. The advisory committee stated in their report that there is no really great way of measuring performance. If we had that CTV report, you would have seen that 97 per cent of those eligible for performance pay got performance pay. You would have also seen that a number of them exceeded the guidelines that were set for performance pay.
I guess it is safe to say that we, as a union, do not like performance pay, because the reality is that how much you get tends to depend on who is doing the rating. It is not consistent, it is not objective. It is very subjective.
A new system has been proposed by the advisory committee: the "at risk" performance pay system. They have not yet developed how that is going to work, but it provides even more performance pay than was previously there. As to your earlier question, you are correct. If they add the DM-4 level, the salary would exceed $244,000. In fact, if memory serves me right, I think it is closer to $260,000 or $270,000, but again all of that has not yet been finalized.
This committee might want to call Mr. Strong back to explain in more detail how they are going to come up with a system that, first of all, is objective. I would suggest that if they are also going to come up with a system, it should be open and transparent.
Senator Lavoie-Roux: I suppose your only ambition in life now must be to become a deputy minister.
Mr. Bean: No thanks, that's not my ambition in life. It is to retire in two years.
Senator Cools: I thought you were going to say your ambition in life was to be a senator.
Mr. Bean: Well, that too.
Mr. Chairman: Don't call that retirement, though.
Mr. Bean: If you know of some openings, I am ready, but I want to do it before you get into that elective process. I have had enough of the elective process.
Senator Lavoie-Roux: It depends on which province you come from, and from which district. There might be good ears on the other side to promote your appointment.
Senator Forest: I gather, however, that, with proper criteria, you are not opposed to merit pay.
Mr. Bean: I think there is room for merit pay. The difficulty we have always had with merit or performance pay, or whatever other tag you want to put on it, is that a way has not been found to make it objective.
Many people often do the rating and, of course, they all do not use the same criteria in the same way. When I worked in the federal government, I did performance evaluations for employees that worked under me. I would give a performance evaluation that said they were fully satisfactory, or maybe a little bit above satisfactory because they did their job in a good manner, and carried out their work.
Another supervisor I worked with would rate employees as outstanding when, in fact, we all knew they weren't as good as the employees I was rating as fully satisfactory.
Senator Forest: That would be your opinion, of course.
Mr. Bean: But the problem is that we were both supposed to be using the same system. We both knew what the system was. I didn't get complaints from the employees I rated until they found out that the other supervisor rated people as outstanding.
I figured that if you did your job, you deserved a fully satisfactory rating. That's the problem with assessing performance on merit. If the same individual knew everybody, and rated everybody using the same criteria and format, maybe it would work.
Senator Forest: We heard from the committee, and I guess I know from personal experience that, at the prevailing rates of pay, we are losing a lot of people at the upper level, and we are having a hard time attracting good people. I am not just speaking about government, I am speaking about private business, which I was with involved with. Is that same phenomenon at work in the ranks of employees for whom you are responsible?
Mr. Bean: Yes, it is always dangerous to generalize, but there are a number of groups, not all groups. We can certainly produce data for some of our members whose salaries are close to 60 per cent behind comparable jobs in the private sector. There are others who are 10 per cent to 20 per cent behind.
I see the Professional Institute here. I know they have raised these concerns with regard to auditors and computer science people in particular, so I imagine they will talk about those later. But the same is true in a number of our groups, also.
Yes, people are leaving. People often stay, if they have a number of years of service, because of the pension plan. They tend to stay even though they are not happy, and you have a very demoralized workforce.
They stay because their pensions are locked in. If they have been there thirty years, they hang in for another five years to finish their service. I don't think that is a very good way to keep employees, though.
Senator Forest: No. We did hear that, in cases where government employees were paid less, if you took into consideration their benefit package, which is for the most part more favourable than in the private sector, it would tend to level out. Would you agree with that?
Mr. Bean: No, I wouldn't agree with it. The truth of the matter is that for six years there has been absolutely no change. In fact, in our case, it is more like nine years, because the last collective agreement that we negotiated was in 1989.
In 1991, we were legislated back to work when we went on strike. There had been no negotiations until 1997, but we have gone nowhere and we're into 1998. This is why we request that you recommend that a pay research bureau be re-established.
Both of us used to have data which at least was produced in consultation with the employer and bargaining agents.We could argue about where, in the range of that data, one should be, but we were not able to argue that the data was not valid.
Now we produce data that the government says is okay. You are looking at large employers, 500 or more employers. No doubt we have smaller ones, and the government takes all of the small businesses, too, and puts a weight on them. That is why we would like to see a true evaluation like we used to have when the pay research bureau was there.
Senator Forest: You are speaking of an evaluation in comparison to the private sector.
Mr. Bean: Yes, because you have to evaluate based on a job that is comparable. It is not just a simple matter of saying that this employee is a CR-4 or an AS-2, and so somebody in the private sector is comparable. It may be that they are, but you have to look at their job duties before you determine whether they are, in fact, comparable. That is why we have the recommendation. We think it is time that we had reliable data, and by that I mean data that both the bargaining agents and Treasury Board could use. I believe that this information, certainly based on our data, will support that it is not true that the public sector has all these benefits that the private sector does not have.
Senator Forest: No, I wasn't suggesting that, but of course we must recognize that many taxpayers will say that we have had a decrease in our pay over the last few years, too, in certain areas. Thank you very much, Mr. Chair.
[Translation]
Senator Lavoie-Roux: On page 8 of your statement, you recommend that the Advisory Committee on Senior Level Retention and Compensation be disbanded or reconstituted so as to make its composition more representative and its process more transparent. Could you elaborate on this recommendation? What is the present composition of the committee? Why do you say that the composition is not sufficiently representative or the process sufficiently transparent?
Ms Turmel: As we mentioned initially, a list of regular persons and other corporate and union representatives on the committee has not been provided. We want the process of reviewing compensation in general to be an open one and for public hearings on the matter to be held.
Senator Lavoie-Roux: Have you asked for a list of the names of the members of this advisory committee?
Ms Turmel: Yes, we have and we have yet to receive an answer to our question. We did hear from the chairman of the advisory committee and we were told that there was a union representative on the committee, but as we mentioned in one of our letters, this person is a former head of a federal public sector union. He is currently working at the management level on other matters. He is no longer a union representative.
Senator Lavoie-Roux: Would it to be fair to say then that the advisory committee was not very receptive to your request for the names of committee members and that no consultations were held about the process in question?
Ms Turmel: I will go one step further than that. The process has been a closed, secretive one. When we ask questions about the composition of the committee and request information about increases, wages and evaluations in terms of percentages, we fail to get any specific answers.
[English]
Senator Lavoie-Roux: Do you want to add something?
Mr. Bean: Yes, I might add that if you look at pages four and five, we talk about the different approaches that were taken. Very senior executive people from private industry basically made up the Advisory Committee on Senior Level Retention and Compensation.
In addition to that, you will notice that when they were dealing with the 1995 Commission on Judges Salaries and Benefits, that was an open process. At least, it was advertised. People had an opportunity to make presentations.
This advisory committee was not advertised, although I want to assure you that we did appear before it. We raised our concern about the secretive way they were operating, instead of being open and transparent. But it didn't do much good.
Senator Lavoie-Roux: How does the government justify its decision to create an upper, upper class of deputy ministers, an extra class of them. What is the rationale behind this? Will he or she be paid higher than the actual deputy minister? You have this somewhere in your brief.
Mr. Bean: I do not think I can answer for the government as to why they are doing it, except I think it is pretty clear that they are losing a significant number of long-term deputy ministers. One has to assume that one of the reasons they are talking about creating another level of deputy minister has more to do with compensation than anything else.
One could assume that they believe that if the compensation package gets high enough, then they may lose fewer deputy ministers to the private sector.
Senator Lavoie-Roux: That would be the only rationale, from your point of view.
Senator Cools: On page 1 of your brief, in the section where you speak about the "...very busy spring on the compensation front," I notice that your third point on that page states, "The government has introduced legislative amendments to the Judges Act that will increase the salaries and benefits of the judiciary by at least 12 per cent over two years."
I suppose at first blush that seems to be a remarkable increase on salaries that many think are already remarkable. I wonder if you could expand and tell me a little bit more about what you meant in that sentence.
Mr. Bean: First of all, I am not here to argue whether or not judges should get a pay raise. I generally support pay raises for all workers, no matter what level, including the Senate, by the way.
Senator Cools: I am appreciative.
Senator Lavoie-Roux: You might be the only one.
Mr. Bean: I might be the only one that would do that, but the reality is that I look at it from two perspectives. One, it is a pretty substantive increase, while working level people, if I could use that term for people in the $25,000, $30,000 range, have been fighting through negotiations for a year, and have been offered 1 per cent or 1.5 per cent.
I suggest that there is something wrong with a system that give raises to the higher-paid people but not to the lower-paid ones. Secondly, we are concerned that while lower-paid workers have taken a salary freeze for six years, in fact there are groups, and I believe it is the judges, that have only had a salary freeze for four years.
I would suggest that there is something unfair about that also. Again I do not want to belittle the judges -- I am not here to belittle any group that gets a pay raise -- but I am here to represent the lower-paid workers. Without them, this government, or any government, could not deliver services to the Canadian people.
Senator Cools: I think the bill that you are making reference to, and we should put it on the record, is Bill C-37. Have you studied the bill at all?
Mr. Bean: No, I have not personally. I've seen it, read through it, but I have not studied it.
Senator Cools: Supposedly this bill is the prodigy of several cases, where basically, my understanding is that the judges are now saying that the governments cannot reduce their salary, which is pretty astonishing, if not stunning. I was just wondering if you read the bill, if you had any comments on this whole notion that judicial independence means that we cannot tamper with their salaries.
In point of fact, the real notion of judicial independence, which is a parliamentary notion, is not theirs; they derive no rights from it. It is essentially that their salary must be determined by Parliament and Parliament alone. It is very interesting that that particular bill now seeks to introduce a new level of compensation mechanisms. I have been working on this material for quite some years and I have seen all the tricks in the game, but this one is pretty dramatic. I was just wondering if you have any opinions on that.
Mr. Bean: I share your concern that judges are not much different than other workers, except they get paid more and may well be more educated than some other workers. Obviously, if the government can affect the wages of other workers, then I would suggest they have the right to affect judges' salaries.
I found it amazing that the judges said, when discussing their pay, that if they did not get a pay increase, their ability to act in an integral manner would be challenged somehow. I did not know that pay made that difference.
Senator Cools: I gather from what you are saying that you disagree quite strongly, but you are saying it quite politely. Anyway, that is another issue. It is just that you are the first person to have mentioned it in a presentation. I was amazed that you were even informed of it and that you had paid some attention to it. I thank you for that.
Senator Moore: On page 2 of your brief, you talked about the public sector working to recoup income lost to inflation. You are talking about the years between 1991 and 1997, I gather. Now, for the last two years, inflation has been relatively held. In some sectors of the economy, there has been deflation. Is there a number there?
Mr. Bean: I think our loss in salary is about 8 per cent to the cost of living. I think it may be in the brief somewhere. I cannot remember the exact page. I thought we also had it on the chart, but I don't see it.
Mr. Chairman: I think it is 9.1 per cent.
Senator Lavoie-Roux: Is that over six years?
Mr. Bean: Yes, that is over six years.
Senator Moore: Senator Lavoie-Roux asked you about "at risk" performance. What does that mean? I don't think we got a clear answer.
Mr. Bean: I found the figure: it is 9.8 per cent, and is on page 10, in the second paragraph, at the losses. I do not think I can give you a fair answer of what the risk compensation is. You will have to talk to Mr. Strong about that. My understanding, from the brief meeting that I had with Mr. Strong on it, was that they have not yet developed a criteria to deal with this "at risk" compensation.
It is a new proposal for performance pay. The advisory committee is going to come up with some criteria as to what that means, but as far as I know, they have not yet.
Senator Moore: What do you think it means?
Mr. Bean: My guess is that it means that where there used to be a limit of 10 per cent performance pay, they have now opened it up so that some people can get to 10 per cent, some to 15 per cent, and others to 20 per cent.
One would guess that they may come up with a criterion that assesses whether you have met certain goals.
Senator Moore: What do you think?
Mr. Bean: The criterion could be, for instance, that if a deputy minister, in meeting an employment equity goal within a department, would score `X' number of points, he would get a higher performance bonus.
Senator Moore: What do you think "at risk" means?
Mr. Bean: I assume it means that you may not get up to 20 per cent using the DM level. You may get something less than 20 per cent.
Senator Moore: I am confused as to what the risk is. When you are hired to do a job, you do your job. We all do that day to day. Where is the risk? I do not understand what that term means.
Mr. Bean: I guess the "at risk" is you may get less than 20 per cent. I do not know.It is a recommendation from Mr. Strong's committee.
[Translation]
Senator Ferretti Barth: You represent 155,000 public sector employees. Can you tell me what percentage of this workforce is nearing retirement? If you know the figures, have you taken steps to devise a program to find people to fill these vacant positions when the time comes?
[English]
Mr. Bean: I must admit that I cannot give you figures at this time as to how many people would be at, or close to, retirement age. In the federal government's downsizing program, if I could use that term, some 50,000 people were told that their jobs were surplus. A large number of people, older workers, either took the early retirement incentive, which meant that they could leave at 50 and not suffer the 5 per cent per year penalty in their pensions; or where that did not apply, a large number of them took early departure incentives, with cash payments to leave, rather than stay and run the risk of being laid off. I have not seen figures at this stage, because the program that is studying age within the federal public service is still ongoing. I do know, however, that the bulk of the employees still within the federal public service are in the 40-to-50 age range.
If we were to negotiate meaningful salary increases, I do not think, given the unemployment situation in Canada, that there is a large problem in getting people into the federal public service. Right now, of course, they are not rushing to the public service because they know that the private sector can pay more. In fact, I was meeting with a group yesterday, and this is one of the private sector employers who we are now dealing with because of the alternate service delivery. They pointed out that they are taking over a group of employees in Moose Jaw. They have already given those employees a 10 per cent pay raise because they are so far out of whack with what they pay their existing employees.
[Translation]
Senator Ferretti Barth: The government, in particular the department responsible for the public service, is very concerned about the exodus of senior level executives, or the so-called brain drain.
Have you met with the department to discuss what you are going to do about this situation? You realize that public service jobs are becoming increasingly scarce. Do we want to recruit young people to replace workers who are retiring? Could your union not set up a recruitment program and try to rekindle in people the desire to be public servants? The union has after all a certain responsibility to help restore the image of the public service.
You speak on behalf of public sector workers. You have a considerable moral responsibility to restore the public service's image.
[English]
Mr. Bean: Yes, I share the concern. We are trying to talk about image within the public service to the best of our ability. It is hard to do it when the employees you represent are so demoralized because they have waited 14 years for pay equity and still do not have it, even though it is the law in Canada.
I met with human resources personnel from Bombardier. They told me that they automatically give the employees that they are taking over a 10 per cent pay raise. The federal public service salaries make no sense compared to what Bombardier pays its workers. It is hard to convince people that the public service is a good place to work.
Senator Ferretti Barth: You have to convince the government that people would be more attracted to the public service.
Mr. Bean: Yes. We would love to be able to negotiate staffing and we have asked for that. We are prohibited by the Public Service Staff Relations Act and the Public Service Employment Act from negotiating anything dealing with staffing.
[Translation]
Ms Turmel: As permanent employees retire, we are seeing more and more term employees. This does not help very much to rejuvenate the federal public service.
The Public Service Commission is in the process of setting up training programs. We have decided to participate in certain committees to ensure that training not only targets the senior management level, but all employees at all levels, so that we can prepare properly for this new era.
Senator Ferretti Barth: Earlier, Senator Lavoie-Roux asked whether it was possible for us to learn the names of the members of the advisory committee.
Senator Lavoie-Roux: That is not what I asked. I was wondering if the public service representatives knew who the committee members were.
Senator Ferretti Barth: Yes, you asked if they knew these persons' names and they answered no. Is that right?
Mr. Bean: Correct. We do not have these names.
[English]
Mr. Bean: No.
Ms Turmel: I said no. I am sorry, I made a mistake.
[Translation]
Senator Ferretti Barth: Then you do know?
Mr. Bean: Yes.
Senator Ferretti Barth: Could you possibly share the names of the advisory committee members with us?
Senator Lavoie-Roux: Would you be willing to send us the list of names?
[English]
Mr. Bean: We will send it to you.
The Chairman: They are public. Mr. Strong, when was here, went through a review of some of the names.
Mr. Bean: If you want, we can certainly send the list to the committee clerk. It will be no problem.
Senator Lavoie-Roux: Mr. Chairman, I would like to give them another question. I just want to say that you made five recommendations. I appreciate them, and I can assure you that I shall bring them back to our committee for examination and see if there is anything we can do. Thank you for having come before us.
The Chairman: With regard to the release of documents relating to the announced executive compensation system, was there a reason why you did not receive that information? Did they give you a reason why you could not receive that information, or have they just simply not given you that information?
Mr. Bean: No. They claimed that a certain section of the Information Act would apply. We disagree. We will certainly send to your committee the letter that we sent to the commissioner asking for it, and which explains why we have challenged the decision. We shall certainly send that to the committee.
The Chairman: We shall follow up on item 2, as Senator Lavoie-Roux stated. Senator Kinsella asked Lawrence Strong to give our committee a copy of all the studies. We may run into the same stonewall; that is why I asked the first question. I should not say stonewall. There may be legitimate reasons for all we know, but at least we are going to try to find out about it.
You have made an excellent presentation. Thank you. I have one last question that is always being asked of me. People take these early buy-outs and retire. They then come back on contract, not directly, but via a contract through a government consultant. This bothers some of us, especially people in the private sector. Do you have, other than hearsay, any degree of evidence of that taking place?
Mr. Bean: I do not think I have any degree of evidence of it taking place in this latest round. I want to be fair about this. In the latest round, I have to say that I think the government did a better job.
In previous rounds, there was all kinds of it. Senior level people left and then reappeared, sometimes within the matter of a weekend or a week.
Some people who have left the public service -- and I might be able to dig out some information on it -- have now appeared as senior officers of a company that is doing alternate service delivery.
The Chairman: I would appreciate that.
Mr. Bean: There is some of that, but the number is not as large this time.
The Chairman: I am thankful for that, because that is important.
We have with us now Mr. Steve Hindle, President of the Professional Institute of the Public Service of Canada. He is accompanied by Mr. Bob McIntosh, Policy Advisor, and by Mr. Richard Bellaire, Research Officer and Compensation Analyst.
Mr. Hindle, we very much appreciate your attendance here with us today to discuss the question of retention and compensation in the federal public service. I do not think I need to go through why or how we started this all up again, but it has been a bit of a concern to this committee for a while.
If you have a statement that you would like to make, please proceed.
Mr. Steve Hindle, President, Professional Institute of the Public Service of Canada: On behalf of the Professional Institute, commonly called PIPS, we welcome the opportunity to testify before the Standing Senate Committee on National Finance, especially on the important issue of the retention and compensation of employees in the federal public service.
PIPS is the certified bargaining agent for 33,000 professionals and scientists who work in the federal, New Brunswick and Manitoba public sectors. We have included a more comprehensive list as Appendix A to our brief. The vast majority of our members are employed in federal government departments, with the Treasury Board designated as the employer for collective bargaining purposes. That is just to set the stage at this point.
In our Fifth Annual Report to the Prime Minister on the Public Service, the Clerk of the Privy Council signals that a quiet crisis exists in the public service. Indeed, the situation is so grave that the operational viability of some portions of the public service may be imperilled by the inability to retain and recruit experienced professional staff. The clerk's belief that an ambitious program of reforms is sufficient to address the issue does not bear out in the workplace of the people represented by the Institute. Little meaningful action has been taken to resolve the fundamental issues that are causing the not so "quiet crisis." I will spare you reading the quotes from all the reports, although I may refer to them later on.
It is widely recognized that there is a need to focus on recruitment. In addition to La Relève documents, the Auditor General reinforced this point in his most recent report. Just to highlight some areas of shortage, he has identified policy analysts, economists, auditors, computer system specialists, financial officers, mathematicians, statisticians and engineers. In addition, the Public Service Commission, the parliamentary agency with the authority to make appointments to the public service, also continues to sound the alarm on the increasing shortage of professionals. Their list includes engineers, computers system analysts, mathematicians, statisticians, economists, auditors, financial officers and foreign service officers.
Recruitment strategies, however sophisticated, will not work without resolving the fundamental issues that cause the negative working environment.
Our members work in a negative environment characterized by increased workloads and diminished resources. They have had their wages frozen for five of the past six years, and most members are well into their seventh year with no pay adjustment in sight. The wage freeze included a two-year suspension of in-range pay movements, which arbitrarily held people to pay rates below the established job rate for the duties performed. Many have had to contend with the threat of job loss. They have seen valued and experienced colleagues declared surplus and have seen them exit the public service. This expertise has not been replaced, and important programs have suffered. For many of our members, the cutting exercise of program review demonstrated an appalling lack of understanding of the services and programs they have devoted their working lives to deliver.
There have been reports that overly generous termination packages, featuring a waiver of early retirement penalties, led to an oversubscription of those wishing to depart. Our members tells us that it was the prospect of this deteriorating work environment that prompted many to prematurely terminate their careers in the public service, not an overly generous golden handshake.
To some extent, the realities of the workplace have been recognized in the Auditor General's most recent report. I would recommend the whole of the chapter to the committee.
A direct result of the negative working environment is the "brain drain," where talented professionals migrate to other employers. Recruitment of experienced, knowledge-based workers becomes problematic, and the public service increasingly becomes the finishing school for other employers.
Employees in many of the professional occupations represented by PIPS have seen career opportunities open up in the private sector. There has been a great demand for computer administrators, the CS category, to deal with the Year 2000 problem. Auditors, AUs, with experience administering the Income Tax Act, and scientists with specialized skills, are also in demand. As a concrete example, in the Communication Research Centre of Industry Canada, out of a total of 129 members with science and engineering qualifications, 67 have been recruited since 1993. Of the total 67 people recruited, 29 have already left the public service for better offers in the private sector. These job offers provided pay increases ranging from 10 per cent to 80 per cent above comparable public service pay levels.
Revenue Canada has reported on the difficulty of recruiting and retaining auditors and computer administers, and I am going to read this quote from the La Relève document on recruitment for Revenue Canada:
The retention of AUs and CSs is becoming a concern for the Department. Since Revenue Canada employs 95 per cent of the AUs in the federal public service, the risk of losing AUs to other government departments is not high. However, the attrition of AUs is increasing in Southern Ontario where private industry is expanding -- in the month of January, 32 AUs in that region left Revenue Canada for the private sector.
That is, in one month, roughly 1.5 per cent of the AU complement left for southern Ontario.
The number of resignations was largest in the scientific and professional category, and was three times higher than the rate for the executive category. The combination of dissatisfaction with working conditions and the demand for experienced, scientific and professional staff in the external market contributed to this exodus. We have provided you with a table. The category and group are the old categories used in the public service. Most of the people we represent would fall into the scientific and professional category, and they accounted for 17.7 of those who resigned.
The demographics of the survivors of program review add another dimension to the retention issue. Of the employees represented by PIPS with Treasury Board identified as the employer, nearly one quarter have 20 or more years of service, and 10 per cent had 25 or more years. In a few years, these percentages will be even greater. For example, by the year 2001, 25 per cent of the scientific research group will have 25 or more years of service with the federal government. In some cases, these highly qualified professionals have had prior service with other employers.
The age profile of the public service did not escape the scrutiny of the Auditor General. The result has been that the average age of the public service employee has increased from 40 to 42 since 1995.
The clerk's La Relève initiative encompasses many actions intended to provide Canadians with a professional public service into the next millennium. Regrettably, La Relève does not deal with the fundamental issues of adequate levels of funding, employment security and fair levels of compensation. We have seen departments expend considerable efforts to follow Treasury Board instructions on business planning, as part of the La Relève agenda. We have outlined in that box Treasury Board guidelines on business plans.
Human resource plans will not achieve the desired objectives without resolution of the fundamental issues undermining the effectiveness of the public service.
The planning process has compounded the problem by requiring departments to look for organizations within as candidates for alternative service delivery. The government is still committed to restructuring the public service to create new service delivery agencies. There are many labour relations issues raised by these initiatives, not the least of which is employment security. The government's refusal to revert to the 1991 Work Force Adjustment Directive, as promised in 1995, is a fundamental issue that contributes to the negative working environment of the public service.
I would now like to turn to some compensation issues. Competitive compensation is a prerequisite to the successful application of recruitment strategies. Over the past several years, federal public service employees have had to shoulder a disproportionate share of the burden of deficit reduction. Figures indicate that private-sector wage settlements increased by 15 per cent since 1991, while public service employees received one 3 per cent increase during that same period of time. The table below shows the impact of the wage-freeze legislation. I just draw your attention to the totals: the compounded Consumer Price Index from 1991 to 1997 was 15.3 per cent. The compounded average weekly earnings rose 18.2 per cent. The compounded private-sector wage settlements rose 15.2 per cent. The general salary changes for PIPS groups was a nice little 3 per cent, down at the bottom. There is quite a substantial difference. This is an indication of what the people we represent have lost against inflation, against the average weekly earnings of other employees.
Then we turn to the forecast for the future. As you can see from the table, in 1997, the forecast is anywhere from 2.6 per cent to 3.6 per cent. In 1998, it goes from 2.6 per cent to 3.8 per cent. In 1999, there is a projection of 2.7 per cent. These increases will further erode the public service as a competitive employer for critical, knowledge-based workers. Today, there is a widening gap between compensation for those working for the federal government and comparable employees in the external market, as illustrated by several examples.
I just want to go through some of the groups that we represent. Engineers are one of the largest groups represented by the Institute. Traditionally, the salaries of our members have been compared to the salaries of professional engineers in Ontario, as reported by the Association of Professional Engineers of Ontario. This is a valid comparison, since 43 per cent of the engineers we represent work in Ontario, and another 15 per cent work on the Quebec side of the National Capital Region.
When comparing the average salary of our members to the average salary of Ontario engineers, based on the year they received their engineering degree, the engineers employed by the federal government are about 18.5 per cent behind the external market. Please note that the figure shows B.A. graduation; that should actually be B.Eng. graduation.
The salaries paid to the external engineering market in 1991 are slightly ahead of what engineers employed by the federal government were being paid in 1997, six years later. There is a similar pattern for the members of the physical sciences group and chemistry group. Current salaries for those employed by the federal government equal what the external market was paid back in 1991. We have caught up to where the private sector was six years ago. The discrepancies are even more dramatic in the auditing group. The public service is forced to compete in a marketplace that pays up to 85.7 per cent more for experienced senior auditors. A recent internal Revenue Canada document reveals that the shortage of auditors has caused the department to fall short of its tax-revenue collection objectives. In the southern Ontario region, lost recovery of tax revenues, due to understaffing, amounted to half-a-billion dollars, which represents 39 per cent of the departmental objective for that region. Again, that is one region within Revenue Canada that has lost $500 million. The total payroll of the federal government throughout Revenue Canada for auditors is approximately $250 million.
The department concludes that its inability to recruit and retain auditors is due to its non-competitive salaries, compared with other employers. I do not have the quote here, but the recent Report of the Auditor General indicated that a number of auditors are leaving, even without packages. They are not generally eligible for the incentives to leave. Of the more than 400 that left, I believe only 30 of them left with a package. Obviously, something is drawing them out of the public service.
As for federal research scientists, there is another table comparing the minimums and maximums for Ontario universities, which also employ them, for the various levels. Most Ontario universities do not have maximum salaries for the various academic rates. Therefore, the table may underestimate the gap for federal scientists, but, as you can see, at all levels there is a gap.
On the issue of collective bargaining, when we resumed collective bargaining in the public service in 1997, we expected constructive dialogue with the Treasury Board to address the compensation problems. However, most Institute bargaining teams received pitiful pay offers, in the order of 1 per cent to 1.5 per cent per year, and demands for rollbacks in other terms and conditions of employment. There has been no acknowledgement that compensation problems exist. The table on page 12 outlines the status of bargaining tables currently under way. It encompasses all our members who have Treasury Board as the employer: approximately 29,000 people.
I will make a quick comment about compensation for senior managers. In stark contrast to our experience at the bargaining table, senior managers were treated to a very different approach to compensation. First, the President of the Treasury Board set up an independent panel of outside experts to examine the compensation issues affecting senior managers. However, for the rest of the public service, the government had previously legislated a suspension of third-party arbitration. Second, the Advisory Committee on Senior Level Retention and Compensation developed recommendations based on comparisons with the outside market, not the "one size fits all" policy foisted on us at the bargaining table by Treasury Board negotiators. Third, the minister quickly adopted the recommendations of the third-party review. There was no waiting for a year for those folks.
Now, I call your attention to our chart, which is on page 15. It calculates the announced pay adjustments to the existing EX and DM pay ranges. These increases are substantially larger than the 7.96 per cent increase to the total executive package, over the next four years, claimed by Treasury Board. Treasury Board pay offers of 1-per-cent and 1.5-per-cent increases to its professional staff pale by comparison to income increases of up to 42 per cent that are now being applied to executive incomes.
Now, whether the senior executive cadre merits increases of up to 42 per cent in their compensation envelope, as approved earlier this year, is not the issue for the Professional Institute. What is at issue is the apparent double standard adopted by the Treasury Board. Compensation problems exist in the scientific and professional community. Treasury Board refuses to deal with this reality and instead sees fit to force confrontation at the bargaining table.
This was recognized in studies completed to support recommendations for senior managers. The Public Management Research Centre, part of the Public Policy Forum, was contracted by both the Treasury Board and the Public Service Commission to solicit the views of public service executives on their work environment, compensation and future plans. It is interesting to note that they say that executives are losing valuable and highly skilled employees at an astonishing rate. They are not talking about executives leaving; they are talking about the people who work for the executives.
Most assuredly, the employers' compensation policies for its knowledge-based workforce will aggravate existing retention and recruitment problems. This is not the way to build and maintain a world-class public service.
On the chart on page 15, please note the difference between the current and the new minimum pay for executives. The row of percentage figures going from 17.3 per cent down to 23.2 per cent is the change to the minimum pay for executives. It is a significant change from what it was before.
So where do we go from here? PIPS says it is a time for action. The Public Service of Canada is a vital part of the public infrastructure and it is needed to sustain and advance the social and economic well-being of Canadians. The people who deliver the programs and provide advice to the government work in an institution that is in need of urgent attention. Progress on the following four points will ease the recruitment and retention issue, and begin to restore pride in Canada's public service. First, the compensation issue must be addressed. Canada's economy has placed the services of knowledge-based professionals in high demand. Treasury Board's pay positions, on the other hand, reflect the recession mentality of an employer still in the midst of reducing its workforce. Treasury Board negotiators must come to the bargaining table with an eye to the future, not the rear-view mirror. Give the employer's representatives a new mandate to solve the problem of inferior salaries and other conditions of employment.
Second, value employees and public services. There is a need for visible and sustained political leadership and involvement in addressing the "quiet crisis" facing the public service. Statements and actions by the Prime Minister and government ministers are needed to recognize the value of services provided by federal public employees, and to recognize that these services are pivotal to Canada's future.
Third, invest in public services. The "slash and burn" approach of program review has created a difficult working environment for the survivors. It is time to reassess the levels of funding and resources needed to deliver programs. In many cases, an infusion of new resources will be required.
Fourth, stabilize organizations. The predisposition to devolve, privatize, commercialize or eliminate programs and organizations has destabilized the public service. It deters employees from making a personal commitment to their organizations. Loyalty and dedication to an organization are still valuable and are worth cultivating. Restructure government only when a solid business case exists, based on employee input and public debate.
I thank you, Mr. Chairman, for the opportunity to appear today. We are ready for questions.
The Chairman: On page 12 of your presentation, you note that computer systems administration and law are settled. Could you tell us what the settlement was?
Mr. Hindle: The law-government settlement was the second settlement in the public service after the return to bargaining. It was based on the arbitral award of 1991, which was rolled back by the act which ended the strikes and imposed the first of the wage freezes. I believe their settlement is probably in the 5 per cent range.
The Chairman: Is that 5 per cent in one year?
Mr. Hindle: It is a two-year agreement.
Now, for the computer systems administration group, that settlement was reached at the end of October last year, at 12.5 per cent over the two years.
The Chairman: And law was 5 per cent over two, or 5 per cent of each for two years?
Mr. Hindle: It was 5 per cent for each of two. The thing to note with the law group is that it was based on an arbitral award from 1991. I believe there are only about 64 lawyers in the bargaining unit; it is a very small portion of the lawyers who actually work in the federal public service.
That agreement settlement with the computer systems group was reached at the end of October last year; after some very difficult negotiations. The settlement reflected the employer's recognition that they were losing computer systems people. It is interesting to note that they are still losing computer systems people; that the settlement reached at the end of October might not have been enough to settle the contract if it were to be voted on today. The private industry has continued to be a very hot market for computer systems people.
The Treasury Board itself recognized the need to address the problem with that package, and agreed to reopen negotiations three months earlier than is necessary under the legislation. Therefore, we are going back to the table for the computer systems group at the beginning of November of this year, rather than in 1999.
The Chairman: Your audit group made The Globe and Mail last week, as I understand it?
Mr. Hindle: I believe they did.
The Chairman: It shows the degree of frustration. Can you review with this committee the audit group's long history of frustration?
Mr. Hindle: The audit group has an extremely long history of frustration. They are one the newer groups to PIPS, having joined us in the late 1980s. Part of their frustration comes from the fact that the institute has, so far, since the end of the 1980s, been unsuccessful in attempts to negotiate a collective agreement on behalf of the auditing group. Their collective agreement still shows their previous bargaining agent, the Public Service Alliance.
We attempted to negotiate a first agreement towards the end of 1989, 1990. We ended up in front of a conciliation board. There was a recommendation. There was no substantial offer from the Treasury Board. The auditing group conducted strike activities during 1990 and 1991. They were part of the legislation that ended the public service strikes in 1991.
They had, I believe it was, a 4.5 per cent increase imposed on them for one year, and then they fell into the public sector restraint of zero and 3, zero and zero, and zero and zero. Now, during the period of those zeroes, we did try to bargain non-monetary issues with the Treasury Board.
It is interesting to note that we wanted to change the name of the bargaining agent. We wanted acknowledgement, as we have the certificate. We were told at the bargaining table that changing the name from the Public Service Alliance to the Professional Institute would require reprinting the contract. It was therefore a monetary issue, and Treasury Board could not agree to it. That is essentially the attitude we got from Treasury Board throughout the period of restraint, throughout the period of zero per cents, when we tried to deal with things such as non-monetary issues.
We have been very frustrated. The auditors have faced very poor compensation offers at the bargaining table. They have been at the table for more than a year. We started bargaining prior to the expiry of their collective agreement, and I believe we just passed the first anniversary of the expiry of their collective agreement on May 4.
Having come out from under the legislation of restraint, it has still been more than a year since the AU group actually had what should have been their first pay increase. It should have been May 4, 1997.
The Chairman: It begs the question that if the senior levels of management in computer systems administration have gone to bat and told Treasury Board that they are desperately short and losing folks, has that also occurred in other groups? Why has it not occurred in auditing?
Mr. Hindle: I will offer my speculation. I believe that Revenue Canada, as the essentially single, employing department for AUs, has made representations to Treasury Board. It has made representations about the compensation issues, the retention and recruitment problems of AUs. It is one government department. It has been fairly easy for Treasury Board to ignore it.
In the case of the computer system people, the problem was endemic. It was right across the public service. There probably would have been 20 to 23 deputy ministers bending Peter Harder's ear, telling him that they have a problem with this group, and that he has to find some money to put on the table for them. As a result, the whole public service complained, or made representations, to Treasury Board. In the case of the auditors, it has only been the one lone voice of Revenue Canada.
Senator Forest: On page 6, you refer to the 1996 Work Force Adjustment Directive. Could you elaborate on that?
Mr. Hindle: The 1991 directive is the one that came into force at the end of the public service strikes. It guarantees a reasonable job offer to every employee in the public service.
Senator Forest: And you are saying that the government has refused to revert to that?
Mr. Hindle: At the time that they first took away the reasonable job offer, created most affected and less affected departments, and introduced the early departure and early retirement incentives, they told us that the removal of the guarantee of a reasonable job offer was to get them through a downsizing period. As late as 1995, the minister responsible for Treasury Board stated quite publicly that the board would be returning to the directive, once the downsizing was over.
The downsizing is over, or at least we are assuming it is, because we have been told it is over. Yet when we entered into discussions on going back to the 1991 directive, lo and behold, the employer, the government, was not prepared to re-instate the reasonable job offer provision. They wanted something different.
Senator Forest: Thank you very much. Mr. Chairman. I regret I am 10 minutes late for another commitment. I thank the witnesses, along with the other members of our committee. I am sure that we all feel that we really do need a public service that is properly compensated.
The Chairman: Thank you, gentlemen, for attending, and for your well-prepared submission. We shall be going through it as we proceed next week.
Just for your and everybody else's information, the Auditor General Denis Desautels is here at 5:30. I hope that you will be in this room at that time -- it should be an interesting conversation. And for your edification, this is chapters 1 and 2 of the report of the Auditor General, the House of Commons, to do with the expenditure and workforce reductions in the public service. You should have a copy. If not, we can get you one. Please contact the clerk. I think we should peruse those chapters.
Mr. Hindle: Before I go, senator, I would like to thank the committee members for listening to us and showing the interest that they have in the public service. If our brief raises any other questions, please have somebody contact the institute for additional information or background.
The Chairman: We most certainly shall.
The committee continued in camera.