Proceedings of the Standing Senate Committee on National Finance
Issue 34 - Evidence
OTTAWA, Wednesday, June 2, 1999
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, 2000; and to give consideration to Bill C-71, to implement certain provisions of the Budget tabled in Parliament on February 16, 1999.
Senator Terry Stratton (Chairman) in the Chair.
[English]
The Chairman: We have with us today Mr. Tony Ianno, Parliamentary Secretary to the President of the Treasury Board. Would you please introduce those who are with you, sir, and then you may proceed.
Mr. Tony Ianno, Parliamentary Secretary to the President of the Treasury Board: I have with me Stephen Lane, Director of Expenditure Analysis.
It is my pleasure to appear before your committee on the president's behalf to discuss the government's Main Estimates for 1999-2000. I know that my officials have appeared already before this committee to brief you on the supply process. Today, I should like to focus on the Main Estimates and, more specifically, on what traditionally has been referred to as the "blue book." That is the part of the Estimates that directly supports the Appropriation Act.
The budget tabled in February by the Minister of Finance established a spending framework for 1999-2000 of $153.7 billion. That budget provided significantly increased funding to the provinces, specifically for health care, as well as increased funding for research, innovation and employment support. All of that is being done within the context of continuing to reduce federal program spending relative to Canada's economy.
In 1993-94, program spending was 16.6 per cent of our gross domestic product. This year, it will be reduced to 12.2 per cent. The blue book reflects $151.3 billion, or 98 per cent of that total spending plan, were it all to be spent.
These Main Estimates include the government's request for Parliament's authority to spend both the $45.8 billion, for which annual approval is required, and $105.8 billion of spending under existing statutes. The statutory forecasts are provided for completeness of information, as they are integral to the understanding of the overall picture. Authority to spend the balance will be sought through Supplementary Estimates or through separate legislation over the course of the year.
In fact, total Supplementary Estimates will not necessarily be equal to the simple arithmetic difference of $2.4 billion. The reasons for this are threefold. First, certain liabilities that appear in the Main Estimates have been recorded as budgetary spending in previous years, when the liability was first recognized. Therefore, they will not constitute part of this year's budgetary spending.
Second, the pension surpluses are being amortized over time, which will reduce the level of total recorded spending below what is authorized.
Third, not all of the spending authority granted by Parliament gets used each year. Voted appropriations represent a legal limit on how much a department can spend. As a result, there is normally a gap between that limit and the amount actually spent. This occurs for a variety of reasons, from such unavoidable circumstances as weather-induced delays on a construction project to deliberate management decisions not to spend.
As a result of these factors, total budgetary expenditure will be lower than the Estimates tabled throughout the year.
This year's Main Estimates are $6.1 billion, or 4.2 per cent, higher than last year's. This increase reflects the government's continuing effort to address national priorities in a balanced manner. Roughly one half of the increase is due to increases in statutory spending authorities. This includes almost $900 million for the increased transfers to the provinces for health care; over $800 million for Employment Insurance benefits; another $800 million for equalization payments; and almost $600 million for benefits to the elderly. These increases have been partly offset by the decline of $1 billion in public debt charges.
The operating budgets of federal government departments have been reduced significantly since 1994, in large part as a result of our program review. Total departmental spending is now rising gradually in order to deal with wage and salary pressures and increasing workloads within each department. The largest increases in voted appropriations include costs arising from the return of collective bargaining, roughly $700 million; increased aid to farmers, approximately $600 million; more Canada Education grants, $400 million; and increased spending authority for National Defence, $750 million, almost half of which is for payments to the provinces for disaster financial assistance.
As well, there is additional funding for such programs as the Fisheries Adjustment and Restructuring Program, Year 2000 compliance needs, Canada Student Loans, Indian and Inuit programming, and the restoration of funding to the granting councils.
I should like to draw your attention to some particular aspects of this year's Main Estimates. As is normal each year, there are some changes in presentation. These changes are explained in the introduction to the "blue book," but I should like to touch on the most significant ones.
A relatively important change is that these Main Estimates contain, for the first time, a program vote for which the spending authority will not expire for two years, that is until March 31, 2001. It is for the new Canadian Parks Agency, which is the first agency to be granted multi-year appropriations authority. This was done pursuant to Bill C-29, which states that the unexpended balance appropriated by Parliament for the operational expenditures of the agency will lapse at the end of the fiscal year following the year in which the money is originally appropriated.
I would note that the act to establish the Canada Customs and Revenue Agency, formerly Bill C-43, which received Royal Assent on April 29, includes a similar provision.
We are also modifying certain government-wide authorities this year. I refer, in particular, to three votes that fall within the estimates for the Treasury Board Secretariat because they will be managed by the Treasury Board. They are TB Vote 5, the special-initiatives vote and the new collective-bargaining vote.
TB Vote 5, the government-contingencies vote, is used to provide "bridge funding" for situations that are unforeseen at the time Main Estimates are submitted to Parliament. Any such bridge financing is subsequently highlighted when Parliament is asked to authorize the expenditures through Supplementary Estimates, at which time the contingencies vote is reimbursed.
Due to the discretion afforded the Treasury Board in managing this vote, we are conscious of the fact that the principle of parliamentary control dictates that this be kept within reasonable limits. In this context, I should like to explain why this vote is being increased by $100 million this year. The reasons are twofold. The gradual increase in overall Estimates requires additional flexibility to deal with emerging issues without compromising the supply process. In addition, we are being prudent with respect to potential problems arising from the changeover to the year 2000.
Although Canada is considered to be better prepared for the date change than most countries, the government is taking a number of precautionary measures to be able to respond to any emergency that might arise. This financial planning is one of those precautions. It will enable us to provide additional temporary funding through TB Vote 5 in the event of an emergency.
The Government-wide Initiatives Vote, TB Vote 10, will provide authority to supplement departmental votes for government-wide management initiatives, in particular for comptrollership modernization, positive human resource measures and career transition support.
Modernizing comptrollership so that it is in harmony with the overall direction of management in the government will mean dramatic changes. We have to accelerate the shift away from traditional comptrollership approaches. Management needs are different and the challenges are huge. The old ways of setting policy, delivering service and maintaining public service capacity are no longer enough. Multi-faceted teamwork is required to support the quality of governance demanded by Canadians. Modernization means aligning and integrating analytical capacity with the management agenda. We know that progress will not be uniform as priority projects may vary among pilot departments.
The comptrollership modernization initiatives that will receive funding through this vote will be aimed at accelerating the pace of change, demonstrating measurable results and developing transferable knowledge.
Special employment measures have been a feature of the employment equity program in the public service since the mid-1980s. Items to be funded through this vote will include opening up the workplace and funding career development for persons with disabilities, aboriginal peoples, persons belonging to a visible minority group and women.
Career transition support funding will be to help employees in at-risk jobs, particularly those affected by workforce reductions, through measures such as training and development and mobility and job placement assistance.
This vote will eliminate the need for numerous minor Supplementary Estimates and will increase transparency in the use of funds because the public accounts will report to specific departmental allocations from this vote. If the alternative of tabling minor Supplementary Estimates were followed, those items would generally be presented under the rubric "additional operating costs" and would simply be part of the overall departmental spending.
The new collective bargaining vote, TB Vote 15, will be used to supplement departments' votes for the costs of two collective agreements reached with the Public Service Alliance of Canada on December 29, 1998. Given the timing, the detailed requirements by department and agency could not be finalized in time for inclusion in their Estimates. The vote wording leaves no discretion as to the use of the funds. Therefore, any balance not required for these specific agreements will automatically lapse.
As a rule, off-cycle collective bargaining is funded through Supplementary Estimates or from TB Vote 5. Some years ago, Parliament agreed to permanent allocations from TB Vote 5 for paylist items in order to reduce administration and the paper burden associated with separate Supplementary Estimates for collective bargaining agreements. Therefore, another option would have been to increase TB Vote 5 by $280 million, but that would have left the fate of any unexpended funds less certain for Parliament, as they would have been available for other paylist adjustments.
Alternatively, we could have waited and prepared 106 separate Supplementary Estimates for these agreements. In many cases, this would have involved preparing a Supplementary Estimate for a department or agency with no other requirements, increasing both paper burden and administration, with no increase in visibility.
Again, I should note that public accounts will report on the specific departmental allocations from this vote. This transparency will maintain the integrity of parliamentary control and still facilitate streamlining the administration of government.
The officials from the Secretariat and I will be pleased to answer any questions you may have with respect to the Estimates, although we may have to defer to individual ministers or departments on specific items.
The Chairman: Thank you, Mr. Ianno. Knowing how busy you are, I appreciate your appearance here tonight.
On the first page, you indicated that program spending in 1993-94, was 16.6 per cent. This year that amount has been reduced to 12.2 per cent. That a 4.4 per cent change to the good.
I am always curious: To your knowledge, is that kind of reduction due to the growth in our economy, a reduction in government expenditures or a combination of both. Which accounts for the greater proportion?
Your answer today does not have to be specific, because we have a two-inch thick document as well as all the other material that you have. However, I should like to know. We are trying to ascertain what our growth in income has been, as a government, as well as our overall cost reductions to arrive at that percentage. You must have that kind of data available.
Mr. Ianno: In 1993-94, we were doing program review and we had to reduce because of the large deficit. As you know, the government reduced expenditures by 7 per cent and more at that time.
Over the last four to five years, the economy has been growing and both the interest rate and the inflation rate are down. More Canadians are able to work and the export market is growing. The government has been more prudent and has dealt with some issues -- the reduction of the number of employees in the government, the terms of expenditure, NAV CANADA and so on. The above factors have combined to produce a better fiscal situation and that is what we are dealing with today.
On a percentage basis, the growth has gone from 16.6 per cent to 12.2 per cent, even taking into account that this year we have increased our expenditures quite a bit to take care of the health needs of Canadians.
The Chairman: I appreciate that, but I still think there should be relatively concrete numbers on either side. Since that time, what has our GDP growth been in terms of dollars? What has our cost of operation been reduced by in real dollars? You must have arrived at that 4.4 per cent reduction by using some analysis like that, I would expect. I would appreciate that kind of answer.
Regarding the increase in this year's Estimates of $6.1 billion or 4.2 per cent, we around this table are always concerned when we see a figure like 4.2 per cent and we know that inflation is around 1.7 per cent. I take exception to the fact that, despite good management, we are looking at a number like 4.2 per cent.
I will acknowledge that because of the nature of the beast, we have been reducing costs and freezing salaries for so long that there had to be some kind of rebound. We have frozen health care costs and salaries. We have done many things. However, I should like some assurance that this 4.2 per cent increase is an aberration and will not be repeated on an annual basis as we go down the road. That is the concern that everyone around this table has.
Mr. Ianno: First, we are sensitive to that concern. We have been at it for close to six years to ensure that only those items that are most in need and not frivolous items are put into place. Health care was a major concern all across the country and it still is today. We felt that it was important to put $11.5 billion into the hands of the provinces so that they could start to deal with some of the items that were most in need -- especially emergency wards and all the other issues that Canadians care so deeply about.
From a philosophical perspective, we do not want a two-tier health system. That is why, once we balanced the books, we chose to start to deal with issues that Canadians care most about. Last year, we took a charge for education of $2.5 billion. Education is very important to Canadians too. Those are the items that basically took most in terms of charges.
We also dealt with $600 million in terms of the difficulties that farmers experienced, especially in Western Canada. That was also important. Canadians felt very strongly about ensuring that our Canadians on the farm were still able to supply Canada with the food and all of the nutrients that it needs. There was also the disaster relief for the ice storm that affected this area.
As a nation, we have had to deal with many issues that have been put on the table. That partly where the increase in the expenditures comes into play. We did not simply say, "We have the money; therefore, let us spend it," and then pick something out of thin air. There is still a debt to be concerned about. There are also many real issues, such as Y2K, that the government must deal with.
The Chairman: I appreciate and understand that. I still return to the rather simplistic view of running a household. You have an envelope that contains certain categories of expenditures. If you receive a raise in your salary of 1.7 per cent, you must live within that means or you have problems in the long term.
My only concern is that if Canadians have to live with that then surely the government should recognize that fact. That is to say, if our population as a whole must live with the limits of inflation and salary increases of 2 per cent or less and if people in the bureaucracies are living with 2 per cent, then surely government should be able to live with 2 per cent.
Mr. Ianno: I agree totally that we should. However, we are talking about the health of Canadians, which is more important. If a child in your house had health problems, I do not think you would consider either the dollar or inflation as the key factor.
The Chairman: I understand that, but we would be cutting back elsewhere. I will not argue the issue further.
Senator Bolduc: Mr. Ianno, on page 2, you talk about pension surpluses being amortized over time, which will reduce the level of total recorded spending below what is authorized. Can you give us more details on that?
Mr. Ianno: I will pass it on to Mr. Lane if he thinks that I do not have it correct but, to the best of my knowledge, regarding Bill C-78, which we just pushed forward, the Auditor General wanted the $2.5 billion to be amortized and not charged, even though from a public accounts perspective it is recorded. On that basis, with Bill C-78, that $30-billion surplus will be reduced over a 15-year period. The amortization side of the equation and the amount to be paid on the interest side will also be reduced in that process.
Senator Bolduc: I am not an actuary, but I have problems with that. If I understand you, in the last year you paid a pension to the people in the amount of approximately $5 billion.
Mr. Ianno: It was about $4.3 billion.
Senator Bolduc: Yes. The amount that the employees pay is something like $2.7 billion. I am not talking about the past now, but the present. The situation is not as good as it used to be. Is that correct?
Mr. Ianno: We had to introduce Bill C-78 because the way the legislation was written, the actuarial evaluator could not take into account that there was a surplus. He always had to deal with what was required.
The number always kept moving, from a ratio of 60 per cent employer to 40 per cent employee to the current ratio of 70 per cent to 30 per cent, and it would continue to move over the next couple of the years to 80 per cent and 20 per cent and then eventually reach the point where the employee would contribute nothing to the fund. The legislation has to be changed in order to make it back eventually to 60 per cent and 40 per cent. That does not mean that the ratio will go to that. It means that by the year 2004, the potential to increase from 30 per cent to 40 per cent is there only if needed. With the investment fund, hopefully in due time even less money will be required.
Senator Bolduc: It will be better than the sum of the government's obligations.
Mr. Ianno: Exactly. The maximum it can increase is only 0.4 per cent per year, if the minister decides it is necessary.
Senator Bolduc: This year you are creating a real fund.
Mr. Ianno: Yes.
Senator Bolduc: That is another ball game.
Mr. Ianno: The others were paper entries.
Senator Bolduc: As you know, 69 per cent of the budget is on what I call automatic pilot where if we do nothing, money is spent. We have learned from the experience of the 1990s when the budget deficit exploded. Half of this $6 billion increase is due to the automatic pilot, such as health care, employment insurance, equalization payments, the elderly and things like that. On the other hand, interest rates have not been too bad recently, so the government's debt charges are moving lower.
In a parliamentary system such as ours, do you think it is inevitable that a high percentage of the budget goes on automatic pilot?
Mr. Ianno: That is very hypothetical.
Senator Bolduc: We senators must have certain restraints about that. However, for members of the other place, it must be embarrassing never to discuss 70 per cent of the entire budget. That is the reason for that chamber to exist.
Mr. Ianno: Parliament and the House of Commons put it together in the first place. Given the equalization payments, the transfer payments, the Old Age Pension and all of the other issues that make up the budget, we are proud, as parliamentarians on either side of the House, of having built an infrastructure that makes Canadians feel that this has been the best country in the world in which to live, by UN standards, for five years in a row.
Senator Bolduc: I do not want to get into a big debate.
I have a question on national defence. Half of the $750-million addition will be for civil disasters, such as an ice storm or a flood. What is the other $350 million or $400 million for? Is it for equipment? We hear every day that the air force is not so bad and the navy is not so bad, except for the Sea King replacements, and then the army. Yesterday, we heard from retired general Lewis Mackenzie, who told us that our poor soldiers are not well equipped for the modern world and modern wars. Is this additional money intended mostly for increases in salary or is it intended for some additional capital equipment to modernize Canada's armament?
Mr. Ianno: The capital expenditure portions are slated to increase by $382.7 million in fiscal 1999-2000. That is a big chunk.
Senator Bolduc: That is not necessarily armament, because armament is not necessarily capitalized.
Mr. Ianno: It depends on their priorities.
Senator Bolduc: Could you be more specific? It could be for infrastructure.
Mr. Ianno: I do not believe we have details on the specifics. I would assume that a big chunk has to do with the moneys the minister announced regarding salaries.
Senator Bolduc: Would it be possible to get that information from Treasury Board?
Mr. Ianno: Yes, we will get back to you.
Senator Bolduc: Finally, we have new agencies, such as the Canadian Parks Agency, the new Canada Customs and Revenue Agency and another five or six. For the first time, I saw a program vote for which the spending authority will not expire for two years, until 2001. In that case, it is for the Canadian Parks Agency, which is the first agency to be granted multi-appropriation authority. We are entering into a new phase of what I call automatic piloting.
We had automatic piloting before that only for the major programs of distribution in Canada for the people of all the provinces, and now we have government agencies that are partly public and partly private. They are not government corporations completely. They are a kind of departmental corporation. You will give them a budget for three years or two years. We used to do that for the universities in Quebec. I cannot understand that for capital expenditures.
There is a capital program for parks. To say that the management each year will not come back in front of Parliament is not good for the other House. It is not good, also, for the fact that it does not relate to what the Minister of Revenue told us here. He told us that the agency will add accountability. Now we have a budgeting system that implies a three-year term, a two-year term, or maybe a four-year term or a five-year term. I am puzzled. I should like to have your rationale for that.
Mr. Ianno: Parliament approved the process on a two-year basis and that is reflected in the Estimates.
Senator Bolduc: It also includes operating expenditures, not only the capital programs.
Mr. Ianno: Yes, it does.
Senator Bolduc: That means that instead of looking at the expenditures every year, we will look at them once every three or four years.
Mr. Ianno: No, you will still have the information yearly, but some of the planning takes a two-year process.
Senator Bolduc: The appropriation is for two years.
Mr. Ianno: Part of it is for seasonal workers.
Mr. Stephen Lane, Director, Expenditure Analysis, Treasury Board Secretariat: The authority extends for two years but we have one year's worth of spending in the Estimates. Whatever the agency does not spend of its first-year authority will be added to the authority they are given in year two. They are being given two years' spending authority up front.
Senator Bolduc: Thank you. That solved part of my problem.
Regarding Treasury Board Vote 10, is that a new way of doing things?
Mr. Ianno: It is the modernization of comptrollership.
Senator Bolduc: You say it applies to the ministry.
Mr. Ianno: It is all in one for various things, such as the workload increases and other items that pertain to computer systems. It also pertains to the five pilot departments. They are trying to find ways of ensuring a more effective manner of reporting and a better success rate. They are trying to see how they can make that work so that the system is actually measured.
Senator Bolduc: I ask the question because each time we leave an aspect of the budget examination concerning a department in order to do a government-wide examination, a new bureaucracy is developed. Regarding Public Works and Government Services, the Auditor General told us last year that you let approximately $1.5 billion in contracts without seeking tenders. That is very serious. It is embarrassing. When it is on a government-wide basis, it is scandalous. If someone had done that in a ministry a few years ago, he would have been out. It would have been a scandal. How can you explain that?
Mr. Ianno: First, it a time-limited, one-time amount. You may use the word "scandalous," but I doubt if you will find any scandals.
Senator Bolduc: I prefer not to see them.
Mr. Ianno: We all do, and we know we have not found any, which is great. Thus far, we are doing very well. As you know, on a government-wide basis, there are times when you bid online. Sometimes, the number of bidders is limited. There are time constraints. The Auditor General continues to look at this to ensure that it is done properly. Of course, you would like for everything to be on a bid-item basis and tendered all the way through, but sometimes the items are so small that it is cost effective to do it this way.
Senator Bolduc: I tell you that because some business groups develop special relationships with some agencies. We all know that. We have lived through that in various ministries. They can go through departments, such as CIDA, and it is easy for some to get contracts while others cannot. I should like you to have a careful look at that.
I agree that we have to decentralize the management in each department so that it can be more efficient. However, we must respect that type of competition, which is good for the civil service itself.
Mr. Ianno: As you also know, Treasury Board ensures that all of the guidelines are followed. To the best of its ability, it ensures that nothing is as you are stating. We want to be sure that everything is done above board with full transparency to ensure the best value for Canadian dollars.
Senator Bolduc: I repeat that the Auditor General looked at that and he did not like it.
Senator Moore: Mr. Ianno, on page 4 of your brief, regarding the increases, you say that there is additional funding for such programs as the Fisheries Adjustment and Restructuring Program. I assume that is sort of a post-TAGS program. Could you please tell us what that is for and how much money is involved?
Mr. Ianno: The budgetary Main Estimates for the Department of Fisheries and Oceans is $1.314 billion, which is a net increase of $262.3 million. The major changes are an increase of $249 million for Canadian Fisheries Adjustment and Restructuring Programs, including licence retirement programs on the East and West Coasts, and West Coast programming for salmon habitat restoration, selective fishing and other fisheries development objectives. There is an increase of $8.8 million to address the year 2000 compliance requirements, as well as an increase of $7.8 million related to collective bargaining agreements signed by September 15, 1998. There is an increase of $5.8 million to partially compensate for the impact of price and workload increases, as well as an increase of $5 million for funding pursuant to the 1998 budget under the Royal Commission on Aboriginal Peoples. There is an increase of $2 million for funding associated with the establishment of an aquaculture commissioner.
As well, there are decreases. Would you like to hear about the decreases?
Senator Moore: Is the Fisheries Adjustment and Restructuring Program a separate program? Is that a line item in your list?
Mr. Ianno: Yes, it includes all of those I mentioned.
Senator Moore: I wish to return to something mentioned by Senator Bolduc. At the top of page 5, you deal with the multi-year appropriations issue. You say that this was done pursuant to Bill C-29, which states that the unexpended balance appropriated by Parliament for operational expenditures of the agency will lapse at the end of the fiscal year following the year in which the money is originally appropriated. When you say "following the year," do you mean the calendar year or the fiscal year?
Mr. Ianno: It means the fiscal year.
Senator Moore: Is that what gives you the two-year period?
Mr. Ianno: Yes.
The Chairman: On page 7 of your presentation, it is stated that special employment measures have been a feature of the Employment Equity Program in the public service since the mid-1980s. I am sure that every budget contains a measure of this nature. I know that we did it, and I see it being done again.
Are there statistics available concerning a measurement of progress in these fields dealing with persons with disabilities, aboriginal peoples, other persons in visible minority groups and women? I know there are. I am sure you have them for us. What kind of progress have we made? If we have made good progress, then we should be talking about it. If we have not made good progress, then I am concerned because this has been on the plate for a long, long time.
Mr. Ianno: In the middle of last year, a program was announced concerning a committee continuing an analysis of the progress. That committee is working with the government and the departments to ensure that awareness is increased and that hiring should be facilitated. I know there is a concerted effort to continue working toward achieving the goals set in the past.
I do not have the figures with me. However, we can look to see if there is something available in graph form that can give you some insight into the actual progress.
The Chairman: I appreciate that. You mentioned the mid-1980s in this regard.
Mr. Ianno: We will get some information for you, Mr. Chairman. As well, we will take into account the reduction in the number of employees.
The Chairman: I understand that. You can flag that in your statistics. That was when there was downsizing. We can still use the statistics. It should be an interesting story. Surely, after close to 20 years, there should be some resounding areas of success. However, my worry is that there is not.
Both Senator Cools and Senator Bolduc want to examine CIDA. Is that still your wish?
Senator Cools: Very definitely.
Senator Lavoie-Roux: I would love it, too.
The Chairman: As we go through the Main Estimates over the balance of this fiscal year, we should like to ask officials from CIDA to appear. Senator Cools would like that, as I am sure others would.
Senator Cools: Are you asking the Parliamentary Secretary for his support of this project?
The Chairman: No, I am saying that if we have a consensus around this table, we would instruct the Treasury Board officials to be prepared as we proceed with these Main Estimates.
Senator Cools: In fairness to Mr. Ianno, I agree with what the Chairman is saying. We have canvassed the committee members on this. This committee has been interested about the expenditures, workings and functioning of CIDA for a long time.I am sure the Parliamentary Secretary knows that CIDA is a strange and curious creature. It does not operate by statute, as do many departments. I believe CIDA was created by an Order in Council some time ago and the various budgets have grown wildly over the years. Whatever the reasons are, it has attracted the curiosity, interest and study of various members of this committee. Some are interested in what the judges are doing. Some are interested in the other programs. There are many different angles. However, all members agree that it is time for this committee, as part of its ongoing study on the Main Estimates, to pull CIDA out, dust it off and take a look at it. Mr. Ianno, I am sure you will be informed about it. If you can help us, it would be appreciated.
From the point of view of the officials, the Chairman is saying that we are giving you warning that we may be calling on you again and again to give us information and, on some occasions, guidance. This committee prides itself on the excellent relationship that it has with this department and on the candour and openness with which these officials come before us.
Mr. Chairman, are you happy with that?
The Chairman: Yes, thank you, Senator Cools. Mr. Ianno, thank you. We appreciate your and the officials attendance and cooperation. Now you know that we have taken this book and shortened it substantially, so that you can work properly to address our concerns. That is not to say that we are not likely to go into the Supplementary Estimates areas as they come down. We have a supply bill next week.
I want to discuss a logistics concern. We are two years into a mandate and we have to prepare for the possibility of prorogation, which is likely to occur in September. First, we have to protect the assets of the work we have done. Despite the fact that we have put in an interim report with respect to previous work done by this committee, should we put in a one-page interim report of the work done regarding the Main Estimate in the final week? Second, if we are doing work on the Subcommittee on Disasters, which does not want to have its work slowed down but desires to continue working as late as possible, we should also remember that we must have an interim report approved by this committee and by the Senate.
Senator Cools: I support the concept of interim reports addressing both issues, because both reports are on the Main Estimates. What we could do is prepare one Interim Report on the Main Estimates and include in it a report on the Subcommittee on Disasters. We are going into a prorogation mode. We should have a full report in order to protect and secure the work done to date on the Subcommittee on Disasters.
Senator Bolduc: But without any recommendations.
Senator Cools: You cannot make any recommendations, but you have to be able to give members in the future some ground to build on again. I am proposing that the report be more substantial than just one-liners.
The Chairman: It is essentially a summary of the work done to date.
Senator Cools: Exactly: it could be a summary of the work done to date. If we do prorogue, it would be a new Parliament and a new session. In case we are cut off, we should include on the wider Main Estimates something about our intention to study CIDA to find an answer to our questions. That would be done in order to preserve a record of what we agreed upon, because we do not know if this committee will continue to have the same members. If it does, it would be nice to reflect some consensus and some opinions. Could we also put a timeline on that? When would we have that?
The Chairman: That is exactly what I want to talk about. We have presentations scheduled for the final week we are here. We want to hear from three groups during that week, including possibly the Canadian Red Cross, the Insurance Bureau of Canada and others. For that reason, we do not want to preclude doing work during that final week.
Senator Cools: It is very easy. We just get the report of what has been done so far ready. That report can be moving in the Senate chamber while the subcommittee continues working until we adjourn.
The Chairman: We can, as part of that report, ensure that witnesses heard during the final week are a part of that report.
Senator Cools: Yes, it is very much in order to say that the committee has heard from A, B, and C persons, and that it is about to hear from X, Y and Z persons. You can say that the committee is planning to hear from so and so.
The Chairman: We should like to do more than plan to hear from witnesses.
Senator Cools: You can say it is scheduled. You cannot act as though it is done.
The Chairman: I understand that.
Senator Cools: You can only announce an intention.
The Chairman: Is that acceptable to everyone?
Hon. Senators: Agreed.
The Chairman: Honourable senators, we will now proceed to the second item on our agenda.
Our next witness is Mr. Valeri who is here to discuss Bill C-71. Please proceed, sir.
Mr. Tony Valeri, M.P., Parliamentary Secretary to the Minister of Finance: Honourable senators, it is great to be back in front of your committee. As honourable senators can see, there are a number of departmental officials here as well. I will ask them to introduce themselves as they come to the table to respond to any questions you may have.
I am pleased to be here before you today with respect to Bill C-71, the 1999 budget omnibus bill. Senators, this legislation stems from the February budget and, like its predecessors, is a bill with many parts.
It provides historic new funding for Canada's public health care system and sets out the design for significant additional funding under the Canada Child Tax Benefit.
It also includes measures dealing with the operations of government itself, including debt management, income tax administration, First Nations taxation, public service pensions and collective bargaining.
Bill C-71 amends the Federal-Provincial Fiscal Arrangements Act to implement an $11.5-billion increase over five years in cash through the Canada Health and Social Transfer for health care. Some $8 billion will be delivered through the CHST over four years beginning April 1, 2000; and $3.5 billion will be delivered as a one-time supplement to the CHST from funds available this fiscal year, with the provinces themselves determining how much they will draw over the next three years.
When the funding increase reaches $2.5 billion in 2001-02, direct federal cash support under the CHST will be $15 billion per year. This means that the health component of the CHST will then be as high as it was before the period of expenditure restraint in the mid-1990s.
In addition, when the growing value of the CHST tax transfers is added to the cash funding, total assistance to the provinces will reach $30 billion in 2001-02 -- a new high.
The per capita disparities in the distribution of the existing CHST amongst provinces will also be eliminated. By 2001-02, all provinces will receive identical per capita entitlements, providing equal support for health and other social services to all Canadians.
Through this investment, the government is increasing transfers for health care and, at the same time, providing the provinces and territories with more predictable funding.
Two measures in this bill provide assistance for children in need. One deals with the Canada Child Tax Benefit and the other with the GST credit supplement.
The Canada Child Tax Benefit is the primary federal instrument for providing financial assistance to low- and middle-income families with children and delivering federal investments to build the National Child Benefit system.
The 1997 budget announced increased benefits of $850 million under the Canada Child Tax Benefit, which took effect last July. The 1998 budget provided an additional $850 million. Overall, these measures will provide $1.7 billion for children in low-income families.
Bill C-71 establishes the design of the $850 million allocated in the 1998 budget and delivers a further $300 million to enhance the Canada Child Tax Benefit for modest- and middle-income families.
The bill makes changes to both components of the benefit, that being the base benefit and the National Child Benefit supplement. The maximum benefit level under the supplement will be increased by $350 per child in two stages. There will be $180 in July 1999 and $170 in July 2000. This means that a family with two children earning $20,000 will receive an increased benefit of $700 for a total of $3,750 per year.
The net income level at which the National Child Benefit supplement is fully phased out will be increased from $25,921 to $27,750 in July 1999, and from $27,750 to $29,590 in July 2000.
Benefits for modest- and middle-income families will be increased by $184 per family, or $92 per family for one-child families, by raising the phase-out threshold from $25,921 to $29,590 in July 2000. As a result, 100,000 more families will be eligible for all or part of the base benefits.
Bill C-71 also proposes to change the GST credit supplement. In addition to the basic amount of $199 per adult and $105 per child, the GST credit includes a supplement equal to 2 per cent of net income over $6,456, up to $105 per year for singles, including single parents.
The GST credit for low-income single parents would be raised to complement the National Child Benefit by providing these parents with the full value of the $105 supplement, thus providing additional benefits to 300,000 single-parent families as of July 1, 1999.
I would like to provide a brief overview of some of the other measures in the bill. In addition to what I have already indicated, taxation agreements are currently in place with three British Columbia First Nations as a result of the 1997 and 1998 budgets. Three more are proposed in Bill C-71.
The Sliammon and Westbank First Nations in B.C. would be able to impose a 7 per cent value-added tax on all fuel sold on their reserve, as well as being empowered to tax tobacco products.
The Yukon First Nations Self-Government Act is amended to give effect to the GST rebate provisions, which were added to these agreements last year.
Further, there are changes to the Income Tax Act, which allow for cooperation in audits and the exchange of program information between Revenue Canada and the Nova Scotia Workers' Compensation Board. Certainly, current confidentiality safeguards regarding the sharing of information outside Revenue Canada will be strictly adhered to.
Further, the Financial Administration Act amendments clarify that maturing debt can only be refinanced within a given fiscal year. It also details the minister's authorities concerning auctions of Government of Canada securities, and ensures that Parliament receives information annually on the government's debt management programs and plans.
There are also changes to the Public Service Staff Relations Act that extend the suspension of binding arbitration until June 20, 2001, for collective bargaining in the federal public service, thus enabling the government to negotiate wages and benefits and to implement the new universal classification system in a fiscally responsible manner.
Further, the superannuation acts of the public service, the Canadian forces and the RCMP are amended to improve future benefits as well.
There are changes to the Patent Act which clarify the Minister of Health's authority to pay provinces moneys collected by the Patented Medicine Price Review Board from excessive pricing of products by patented manufacturers.
Bill C-71 also clarifies the scope of federal loan guarantees to financial institutions funding advance payments to agricultural producers by amending the Agricultural Marketing Programs Act.
Finally, the European Bank for Reconstruction and Development Act is amended to provide the Minister of Finance with the authority to undertake the financial operations necessary to meet our EBRD commitments.
Honourable senators, these are the highlights of the measures contained in Bill C-71. The bill delivers historic investment in health care and provides assistance for children in need, while at the same time it introduces measures that reflect the government's ongoing commitment to fiscal responsibility.
On behalf of my Department of Finance associates here today, I thank you for this opportunity. We would be pleased to answer any questions.
The Chairman: Mr. Valeri, on the last page of your presentation you talk about the European Bank for Reconstruction and Development Act. You say that the act is amended to provide the Minister of Finance with authority to undertake the financial operations necessary to meet our EBRD commitments.
I was in London a couple of years ago. At that time, we were told that Canada had to give one last cash infusion to the EBRD, which would bring it into balance. That would put it in the position of being self-sustaining. That was prior to the collapse of the Russian economy.
I would like an update on this matter. Where are we today with respect to the EBRD? When you mentioned EBRD commitments in your presentation, is that what that means?
Ms Suzan Kalinowski, International Finance Officer, Department of Finance: Honourable senators, I am with the Department of Finance, and I am responsible for the EBRD.
I am not sure when you were at the bank, but an increase in the capital of the bank was agreed to in 1997 and became effective in 1998. The financial operations referred to in the bill are operations to enable us to make the payments. It gives us the payment authority to pay for that capital increase.
Although the crisis in Russia has had some effect on the bank, this capital increase is not a result of that crisis. In fact, it is a result of the relative success the bank has had in lending operations in its countries of operation. The two are not linked.
The Chairman: Is it appropriate to ask how the EBRD is doing as a result of the crisis?
Ms Kalinowski: The bank was exposed to Russia, but largely to the private sector, not to the public sector. Nonetheless, as a result of the crisis, it has suffered. It was not affected by the government's moratorium on debt repayments because it has preferred creditor status and has continued to receive all payments on its official obligations.
The economic decline has resulted in some difficulties in the portfolio. The bank provisioned heavily against any potential losses in 1998, which resulted in the bank's first significant loss since it began operations. The exact number was in the range of Can. $468 million. It is as a result of provisions, so there may be some write-backs.
The Chairman: If the figure was $468 million in 1998, are you anticipating a similar number for 1999?
Ms Kalinowski: In its budget, the bank projects that it will break even in 1999.
Its provisioning was quite generous in 1998, which is a result of the losses. It all depends on how the situation in Russia evolves. It is uncertain at this point. Those provisions might be sufficient to cover potential losses. If not, the bank may require more provisioning, in which case it may not break even in 1999. There may be a small loss.
We are not anticipating another year like 1998.
Senator Bolduc: I have an article in my hands which essentially states that the minister may provide for further payments to the bank. Did the minister have those powers before? I note that in Part 4 of Bill C-71, amendments were introduced to the Financial Administration Act to give power to the minister that he did not have previously. Is there any relation in terms of administrative philosophy to giving the minister a power he did not have before?
Mr. Doug Wyatt, General Counsel, General Legal Services, Department of Finance: The short answer to your question, senator, is "no." What is contemplated under the Bretton Woods and Related Agreements Act is not currently provided for in the Financial Administration Act. You can find this drafting in all the bills relating to international financial institutions, such as this bill, Bretton Woods and the bills administered by CIDA. They specifically deal with that one institution.
Senator Bolduc: Clause 49 is specific, then.
Mr. Wyatt: It is specific, yes.
Senator Bolduc: My next question relates to the confidential provisions about income tax in respect to the Nova Scotia Workers' Compensation Board. Why do you have a specific statutory provision for that board and not others?
Mr. Valeri: With respect to Nova Scotia and the Workers' Compensation Board, they made the request to have an exchange of information in order to improve audits on their part. The rationale behind it was that there was a request.
I would suspect that if another province or another provincial agency makes a similar request, the departments of the federal government would work in concert to see if they could be accommodated. It is not specific to Nova Scotia, but they requested it.
Senator Bolduc: Is it the usual practice within the Department of Revenue, for example, and the provincial administrations to exchange information about the incomes of private citizens?
Mr. Valeri: We would only exchange information in the context of the Privacy Act and only to ensure that we were in compliance. When someone makes a request, any exchange of information is bound by existing acts. It is not that the government or a particular department can exchange any information it would like. It is bound by an act of Parliament as to what information it can exchange.
[Translation]
Mr. Yves Giroux, Tax Policy Officer, Personal Income Tax Division, Department of Finance: As Mr. Valeri said, information transfers are not limited to Nova Scotia, but that is the only province that has requested them for the moment. The wording of the bill will enable provinces that so request to have access to the same information.
Senator Bolduc: Without an amendment to the bill?
Mr. Giroux: According to the wording of the bill, the Department of Revenue can make a transfer to a workers' compensation board of a province. Which province is not specified. This does not require the minister to transfer this information; it is simply stated that the minister may transfer it.
Senator Bolduc: Only to workers' compensation boards or to other organizations as well?
Mr. Giroux: In Bill C-71, it is limited to workers' compensation boards.
Senator Bolduc: I am now going to address the minister.
[English]
What is the rationale for those workers' compensation commissions, and why is it not the same for other types of administration?
Mr. Valeri: I suspect that the Nova Scotia Workers' Compensation Board is making the request because they felt that they would be able to complete their own audits or investigations in Workers' Compensation Board claims, and that they could complete them more fully, perhaps, because of additional information that they may receive from Revenue Canada.
Senator Bolduc: But as I said to your officials, the way this is drafted means that any Workers' Compensation Board, not only the one in Nova Scotia, could get the information if they asked for it, and the minister would have to decide.
I am trying to focus on why you accept that principle of exchanging information about income. We are talking here about a very sensitive matter. One of the things that distinguishes us from dictatorships is the fact that some things are private. I would not like to have information about my income transferred all over the place.
Why is it okay for that type of organization, and why not, for example, for health insurance or some other type of organization?
Mr. Valeri: I am not going to speak on behalf of the Nova Scotia Workers' Compensation Board.
Senator Bolduc: I am talking about the fact that the federal government asked for that power to give information. I am not talking about the other side. You do accept that here.
Mr. Valeri: We accept that, obviously, we have a provision in the bill that allows us to transfer that information to a provincial body that makes that request within the context of the Privacy Act. With respect to this particular request, I would suggest that it would assist the Nova Scotia Workers' Compensation Board in their investigation.
Senator Bolduc: I understand that very well, because, viewed from the other side, it is an argument of efficiency. However, should we bend according to that argument, or should we say no to it? That argument could lead us to so many things. It would be more efficient to do things in one way or another, but the public law is there generally to protect the rights of the individual.
Mr. Valeri: I understand your point. We would certainly be able to stop the flow of information if, in fact, an agency or another level of government that made the request did not comply with using that information as we had intended it to be used. While it is an argument of efficiency from an administrative standpoint, we certainly have a Privacy Act that protects how that information is used, and by whom it is used, and we would have to comply with that. The Privacy Act is there so that Canadians are protected as to the usage of any information that might be transferred between departments or levels of government.
Senator Bolduc: With computers today, so many things can happen. Perhaps I am too old and I live in another world, but I cannot imagine a thing like this 20 years ago. It is out of this world.
[Translation]
Mr. Giroux: We have to amend the bill because the province suggested that businesses can remit their contributions to the workers' compensation boards at the same time as their other source deductions to Revenue Canada. If Revenue Canada sees the amount of the source deductions paid to the workers' compensation board, this information is not properly part of its mandate. It thus becomes confidential information. This is the main reason why we must amend the bill: Revenue Canada must see this information and accept the source deductions for contributions to the workers' compensation boards.
[English]
Senator Bolduc: I have a few other questions. One is on the new powers given to the minister. I alluded to it before. This is in Part 4. I notice that we are changing the traditional Financial Administration Act to give power to the minister to do a great number of things in terms of debt management that usually were the prerogative of the Governor in Council.
If I understand the change correctly, it is a transfer from the Governor in Council. The Governor in Council does those things through rulings and bylaws, and now we are transferring that to the minister, and we are doing it for a lot of things. For example, clause 44 says that, subject to appropriate terms and conditions, the minister may enter into any contract or agreement, issue authorities and so on related to the borrowing of money that the minister considers appropriate. It is a very wide power. I know that the minister is a reasonable man. I am not debating that. However, I am afraid of a minister having too many powers.
When it is in the hand of the Governor in Council, you have some kind of restraint through debates, you have some kind of internal constitutional process in the government. When it is in the ministry, it is another ball game. The Minister of Finance has a huge discretionary power, and we are adding more powers here.
For example, in clause 45, we see that if the minister borrows money by way of an auction, the minister may establish who is governing the conduct of the auction. In other words, the minister is given a kind of regulatory power, but then we see that the rules governing the conduct of an auction are not statutory instruments. That means they do not go in front of the regulation supervision agency that we have in the parliamentary process, the Standing Joint Committee of the Senate and the House of Commons for the Scrutiny of Regulations. Maybe I am too old, but I have difficulties with that. Then, at the end of that, the bill mentions options, derivatives, swaps and forwards, on whatever terms and conditions the minister considers necessary.
Perhaps I am misinterpreting the bill, but the way I see it, we are giving very wide discretionary powers in terms of debt management to the Minister of Finance. We are adding powers that used to be the prerogative of the Governor in Council. Perhaps I am wrong. I would like to hear what you have to say about that.
Mr. Valeri: Senator, I am not sure whether I am correct in stating that a number of your concerns were addressed in the amendments that were brought forward in committee in the House, which gave the authority to the Governor in Council. I am not sure whether you are looking at the amended bill, or the old one.
Senator Bolduc: The one I have before me is the one passed by the House of Commons on May 10, 1999.
Mr. Valeri: As a result of some amendments that were put forward in committee, there are no new powers being devolved to the minister. Those powers remain within the Governor in Council.
Senator Bolduc: That is true for clause 44, but the powers in clauses 45 and 46 are new powers. However, I do not want to criticize the bill unduly, because I must say I agree entirely with you regarding clause 49. We will have a special report on the management of public debt, which I think is a very good thing.
Mr. Wyatt: Senator, if I may, if you compare the measures in this bill with the current legislation, you will find that not much in the way of new power is devolving from the Governor in Council to the minister. You have pointed out that there are some provisions which give the minister powers not found in the legislation. For example, there is one with regard to rules on auctions.
The theory behind Part 4 is that much of what is done by the minister is very technical. The minister presents his budget in the House. The House votes on the budget and approves the budget policy. If new borrowing is needed, a borrowing authority bill is put through Parliament. At that point, the minister's job is simply to borrow the money on the best terms he can get. In today's market, the government does not have a big influence in that regard. It is mainly technical at that point.
The purpose of this legislation is to give the government the ability to move quickly when the market is favourable and to borrow on the best terms. He does not have any new powers in that sense. What he does have is, perhaps, a little more ability to make contracts as the opportunities appear in the market.
Senator Bolduc: The rules established in clause 45 are not statutory instruments. Do you agree with that?
Mr. Wyatt: They are not, senator. That is a very small club. There is a person here from public debt management who can speak to that better than I can. There are approximately only 20 people who participate in those auctions. There have been rules up until now. We have simply formalized the process. There must be rules on who participates and how they participate. This simply formalizes the process that exists today.
Senator Bolduc: The most efficient way for you is to give the adjudicative power to the minister on his own terms, is that right?
Mr. Wyatt: In a sense, the minister is selling off government property. He can say, "I am selling it on these terms. If you do not like it, you do not have to come to the sale." When you bid on a piece of property, you either comply with the auction rules or you do not bid. The minister is selling off our debt. It is done on a bid process. No one is obliged to bid.
Senator Bolduc: In terms of the Public Service Staff Relations Act, you are moving more and more away from binding arbitration. Is the rationale behind that the fact that the government does not want to see its budget influenced by arbitration?
Mr. Valeri: Senator, I should explain that there are a couple of components to the rationale. One is the fact that in terms of our fiscal agenda we are concerned that we need to maintain and ensure that it does not become at risk as a result of any third-party binding decision. There is also the issue of implementing the universal classification standard, which is a wide-ranging initiative under public service reform.
The intent is to allow for what I will call a soft landing as we come through some very difficult times from a financial perspective, and then allow for the opportunity for continued negotiations. There are other measures that are available to unions.
Senator Bolduc: In your opinion, is it more of a conjectural sort of principle?
Mr. Valeri: It fits with our present circumstances. It is a phase that we must get through to ensure that we meet the targets that we have laid out so that taxpayers can receive the benefits that we have promised.
The Chairman: Honourable senators, two letters have been filed with the committee. One is from the Public Service Alliance of Canada, wherein they state:
Bill C-71 marks the second suspension of the arbitration dispute settlement route for federal public sector workers. As a result, in the event that Bill C-71 is proclaimed, federal public sector workers will have been denied an opportunity to resolve disputes through arbitration for five (5) years for two full rounds of negotiations in most cases.
The second letter is from the Social Science Employees Association, the first paragraph of which states:
The Social Science Employees Association (SSEA) is a bargaining agent representing over 5,800 professional employees of the federal Public Service. The Association and its members have been denied the right to bargain with recourse to arbitration for over a decade. Indeed it can [be] demonstrated that the Government through legislation has substantially undermined the collective bargaining process, and with Bill C-71, it will continue to deny federal government employees a fundamental right.
PSAC representatives were not able to meet with the Commons committee due to the shortness of time allowed to review this bill. In other words, the government is trying to put it through quickly.
For how much longer will this denial to the process continue? As the representatives of SSEA say, they have been denied access to the process for 10 years. Our economy is booming, and it has been booming for a while. Things are looking pretty good for the future with respect to federal government income to the degree that income from taxes has skyrocketed substantially. That is something you have to admit. It is $41 billion annually.
When will you be able to respond to these people and say to them, "You will have this right back"? Or do you intend to continue this in perpetuity? If so, be honest with them and say that.
Mr. Valeri: It is important that the committee understand that in the last round of collective bargaining, in 1997-98, when the suspension was in force, the employer was able to reach settlements with over 97 per cent of the unionized workforce.
In the absence of binding arbitration, as is the case now -- and the intent is to extend it until 2001 under Bill C-71 -- the employer is prepared to look at alternative dispute-resolution mechanisms, depending on the circumstance. Obviously, this will depend upon there being agreement between the parties.
With regard to your specific question, Mr. Chairman, it is fair to say that I am not able to answer it at this point. Clearly, the intention of Bill C-71 is to suspend and not remove binding arbitration. That is why we specified an end date of 2001.
In the year 2001, the government of the day will have to make an assessment of the circumstances at the time. However, I would reiterate that our intent is to get through this phase. As you indicated, the economy is doing very well in some sectors. We are also implementing the universal classification system. Thus, we are looking to achieve negotiated settlements.
I will ask an official from Treasury Board to add to my answer, Mr. Chairman.
Ms. Linda Gobeil, Assistant Secretary, Labour Relations Division, Human Resources Branch, Treasury Board Secretariat: I wish to add to the honourable member's comments that we did reach agreements with 97 per cent of the work force represented by the two bargaining agents you referred to. It is also important to keep in mind that we still have tools available to the parties throughout the process that allow them to conclude agreements. Those tools are conciliators, mediators, fact finders and so on. Those tools worked during the last round, and will remain available to the parties during the coming round that started recently. Already we have some success, despite the fact that binding arbitration remained suspended. We were still able in that new realm to get collective agreements with the various unions.
The Chairman: Were the agreements negotiated or imposed? If there is no arbitration, perhaps they accepted the two per cent you offered because they felt there was no choice. They did a little bit of walking out. This committee did a study recently with respect to the public sector. You can recall from that report that workers in the public sector are not happy.
What do you mean when you say "this phase"? How long will it last? Surely you can offer something to them. We are going through a restructuring of classification, whereby they have an opportunity for reclassification in order to attain something more where they were previously limited.
My concern is that you offer 2 per cent but then increase their CPP and pension contributions. What is their net increase? They do not receive anything. They receive less. If you are putting them to the wall on their pension and the so-called "current phase," where is there hope for them?
You sit in front of us and say, "We successfully negotiated." I do not think that was a negotiation. It was an imposition. They had no choice. I think you have to sit before us and tell us when this phase will end. Is there a time frame attached to this phase?
Mr. Valeri: That is why we attached the date 2001 to Bill C-71. I cannot responsibly speak beyond 2001 with respect to this provision in the bill. At that time it will be reviewed and, circumstances permitting, there may be changes, but at this point, the extension is for an additional two years.
The Chairman: I understand that. However, what does "this phase" mean? How can you say "this phase" when you are swimming in money, in additional revenues? Please tell us what that term means.
Mr. Valeri: The phase that I was referring to in my remarks, senator, had to do with the fact that we had come through some very significant, trying times with respect to the finances of the Government of Canada, and that part of the program involved meeting those commitments without potentially having third-party binding arbitration that would take the government off its fiscal track. Further, the reclassification is also part of what I refer to as "this phase."
As far as giving you a definitive end for this phase, I can only reiterate that 2001 is the date that I can give you. Beyond that, I cannot speak to it.
The Chairman: I understand. Nevertheless, you have offered little hope of this ending. My concern, and it is a real one, is that the morale in the civil service is poor. That was the conclusion reached in our report. And it continues to be poor. It is not improving, and there is no reason for it to improve. How, then, can you sit there and offer no resource to binding arbitration and limit their increases to 2 per cent when they have just gone through a six-year wage freeze and expect them to be happy? That is not a question, simply a statement.
[Translation]
Senator Lavoie-Roux: My question concerns the child tax benefit. This benefit will be increased for children in need. At the time of the budget speech, everyone was happy to know that children would be receiving a higher tax benefit this year.
We know that one in five children lives in poverty in Canada. These statistics have never been contradicted, in any case not to my knowledge. Have any projections been made to determine whether this increase in the child tax benefit will help reduce the number of children who live in poverty or whether we are simply adding money? Are we attacking the real problem?
[English]
Mr. Valeri: That is a very good question. The Canada Child Tax Benefit is really targeted to the working poor. Your question goes beyond that because it deals with poor children coming from families who may not be working.
The intent of the Canada Child Tax Benefit program is to help Canadians who find themselves working but in very poor circumstances. The objective was to allow those individuals to continue in the work force, while the government would provide them with additional resources. I indicated in my remarks that someone earning $20,000 would receive about $3,750 in benefits. Those benefits are targeted to the working poor. I will ask the official to speak directly to your question and explain the impact of this benefit on poor Canadian children and whether we have reduced the number of poor children as a result of this program.
Senator Lavoie-Roux: When this measure was introduced a few years back, everyone was pleased that it would help poor children. It is fine and virtuous to almost double the amount of money that is given to them. However, before we do that, has any study been done? Has any projection been made? The benefit has not helped, because the number of poor children has increased. If we double what we now give the families, can we expect any positive effect on those poor children? Or will we find, a year or two from now, that one child in four is poor? Now one child in five is poor, I believe.
[Translation]
Ms Sylvie Rocheleau, Tax Policy Branch, Department of Finance: To answer your question concerning the national child benefit, this is a federal-provincial initiative. A large part of this process is to assess the impact of this measure on our objectives, which are to increase work incentives for parents receiving welfare.
The ministers of social services in Canada recently published a report which establishes the situation at year zero. Each year, they will publish a report on the situation. We hope to show that we are managing to reduce child poverty through our programs.
Senator Lavoie-Roux: The first benefit granted does not appear to have had very positive effects since child poverty has increased.
Ms Rocheleau: There are not really any recognized indicators of poverty in Canada. A number of measures are used. The one most frequently used is published by Statistics Canada, but it does not necessarily provide a good overview of the number of children living in poverty.
There is a general consensus that too many children are living in poor families. Something must be done to improve this situation. The choice of governments is to encourage parents to stay in the job market or to enter the job market, thinking that poverty can be reduced in this way.
There are different ways of measuring poverty levels, including the degree of poverty relative to others. The first level implemented less than a year ago had the effect of increasing the disposable income of low-income families and thus of reducing child poverty to a certain degree. Did this increase enable these children to stop being poor? They are probably less poor than they were, but they are probably still a little poor.
Senator Lavoie-Roux: With regard to the statistic concerning one child in five, poverty has not declined since the benefit has been in place; it has increased. We will be monitoring this next year.
Everyone is happy that we are giving money to help poor children. Not the present government, but rather the previous government said that child poverty should be reduced in the year 2000. The year 2000 is not far off, and there appears to be more poverty than when that commitment was made. Something somewhere is not working. Some thought has to be put into this. Do we have a better way? This question still troubles me.
Senator Fraser: Quebec is not taking part in this program?
Ms Rocheleau: Quebec is not really taking part in the program.
Senator Fraser: The figures by province. If 20 percent of Canadian children are living in poverty, some of that 20 percent in Quebec will not be affected. You are going to give us this information by province.
Ms Rocheleau: I invite you to consult the report published less than a month ago by the ministers of social services at their meeting in Quebec City.
[English]
The Chairman: Are there any other questions from committee members?
Sir, despite the fact I ranted, I thank you for appearing before the committee this evening.
Our next witnesses, honourable senators, are representatives of the Professional Institute of the Public Service of Canada.
Please proceed.
Mr. Steve Hindle, President, Professional Institute of the Public Service of Canada: Honourable senators, in February of 1999, the Standing Senate Committee on National Finance tabled a report to the Thirty-sixth Parliament on retention and compensation issues in the public service. In a letter to the committee chair, the Honourable Senator Stratton, dated March 3, 1999, I commended this committee on its outstanding report. In my view, the report provides a concise and accurate statement on the state of morale in the Canada's public service and the working conditions of my members. The recommendations of the report offer a blueprint for a recovery from the current malaise.
Unfortunately, the ink was barely dry on the report before the government again resorted to legislation to remove employee rights and determine human resource practices. This pattern, which I will explore with you today, is one of the fundamentals that has caused the deterioration of the working environment for federal government employees.
As president of the Professional Institute of the Public Service of Canada, I represent the 29,000 of our members whose working lives are affected by the Public Service Staff Relations Act. Through Bill C-71, which will be the Budget Implementation Act, 1999, the current government is asking to you amend the PSSRA, to deny the binding arbitration dispute resolution method to federal public sector employees.
On the face of it, this amendment appears rather insignificant in comparison with more ambitious labour relations legislative initiatives such as the Public Service Reform Act of 1992. However, I assure you that this amendment is not innocuous. It lays bare the hypocrisy of a government claiming in one breath to promote participative democracy and the rule of law to its citizens while, in another, it undoes public expression through its actions as an employer.
I ask you to carefully consider the facts and commentary in our brief, keeping in mind both the short-term and long-term effects of the proposed legislative action.
Part 3, section 19(1) of the proposed Budget Implementation Act, 1999 suspends the operation of sections 64 to 75.1 of the Public Service Staff Relations Act until June 20, 2001. Under the PSSRA, there are two dispute resolution options: Conciliation board/strike and compulsory binding arbitration.
When the PSSRA was first enacted in 1967, it was viewed as establishing an innovative labour relations system in the public service because much thought had been put into balancing the needs of its citizens for delivery of public services and the rights of federal employees to be treated fairly, both individually and collectively, especially in their employment relationship with the their employer, the federal government.
While collective bargaining had been part of the Canadian private sector since the early 1900s, it was not until the mid-1960s that it started to appear in the public sector. From the categorical statement that "the Queen does not negotiate with her subjects," evolved a focus on ensuring that the public interest was protected by limiting the collective bargaining rights of public sector employees. The PSSRA, unlike legislation applying to private sector employers and employees, made a wide array of tools available to the federal government in its role of employer to limit collective bargaining rights.
I will now outline the four major tools that are included, namely, first, a process to designate employees in certain work and, in so doing, prevent them from striking where the work is considered to affect the safety and security of Canadians; second, directing arbitration boards to consider four specified factors in making awards on compensation and other conditions of employment; third, allowing the employer to keep sole control of staffing and termination rules, and how work would be organized and valued; and, fourth -- and, this is more recent, in 1992 -- the federal government can ask cabinet to have a minister order a vote on its last offer to the bargaining agent.
What arises from the proposed Budget Implementation Act are questions. Why, then, must the arbitration route be denied to federal government employees? Does the employer prefer strikes? Are there other motivations or explanations?
I will not go through the tables that appear in the brief, but they do outline, in a tabular form, much of what we will be talking about here. We would like to start with the return to collective bargaining after six years of legislation and why they suspended arbitration.
The question we have is: What is the employer afraid of? Within a work force of more than 200,000 people in the late 1980s, only a handful of bargaining units sought the use of a binding third party to resolve outstanding bargaining issues. The 1999 budget has been characterized as a health budget. Ironically, for health care professionals in the federal public service, the 1999 budget means they will be denied any opportunity to resolve issues if the negotiations process is no longer effective.
How does it do that? The employer has sought the designation of 85 to 130 per cent of the current population in the new health services group. This group is comprised of professionals in the fields of nursing, dentistry, medicine, nutrition and dietetics, psychology, social work, pharmacology, occupational and physical therapy, and veterinary medicine.
The reason for the differences in the percentages is that the various occupations have different percentages applied to them. Consequently, the conciliation board/strike dispute resolution route has no meaning for the health services group. The PIPS concurs with one of the authors of the PSSRA, Jacob Finkleman, who observed in 1983 that the court's 1982 ruling on designations declared, in effect, that the right to strike under the PSSRA is not necessarily a right in practice. If a large number of employees are designated, the capacity of a bargaining agent is destroyed, since the bargaining agent would be deprived of any effective method in law of resolving an impasse in negotiations. Access to binding arbitration is, therefore, of utmost importance. The health services group is also the only PIPS female dominated group working for Treasury Board.
Let us be direct. By suspending arbitration to the year 2001, Parliament is setting aside the rights of health care professionals to fair treatment. How does this legislative action protect the public interest of Canadians?
The next topic is the PSSRA collective bargaining framework for public sector employees and employers and trying to respect it. In the table, we have laid out the various pieces of legislation, since 1975, which have impinged upon the rights enacted in the legislation in the PSSRA in the late 1960s.
Without going into all the details, the record is very clear. Between 1982 and 2001, the federal government has altered the collective bargaining rules seven times. That includes the current legislation. No respected economic institution in Canada has affirmed that the federal government's actions effectively contributed to its economic goals by limiting the collective bargaining rights of its employees.
In addition, the United Nations, via the International Labour Organization, has rebuked Canadian governments 33 times between 1980 and 1998; and five times it reprimanded the federal government over its restrictions on collective bargaining where the public interest could not be demonstrated. Those 33 times were out of 40 complaints lodged with the ILO.
The provinces of Newfoundland in 1984, Quebec in 1990, and Ontario in 1996, have specifically been counselled to amend legislation to provide for independent arbitration of employees who have been designated.
Where is the real public interest, then? How are federal government employees expected to respect the rule of law when their employer is so quick to assume its other role as legislator and changes the rules to its advantage? With this track record, I think it is entirely fair to conclude that this employer, unlike the vast majority in this country, has no incentive to seriously conduct labour relations. Over time, the federal government has sought to use more blunt and more punitive instruments on its employees, while exhorting them to work more productively and sensitively to the needs of Canadian citizens.
More recently, the employer has shown its intolerance for those employees who do exercise their legal right to strike under the PSSRA. In anticipation of the correctional officers being in a legal strike position on March 26, 1999, the government proposed back-to-work legislation, Bill C-76, on March 22. CXs were ordered back to work on March 30, 1999.
Strikes in the federal public sector are rare. Even with the employer's right to determine which services cannot be withdrawn, legislative returns to work still happen. The Canadian tradition in such situations is to send outstanding bargaining issues to a binding tribunal. In the case of the correctional officers, the employer had legislation drafted that not only ordered the CX employees back to work but also unilaterally determined the unresolved wage and benefit items. This same legislation was used to threaten 14,000 blue collar workers into signing a collective agreement or to have lesser wages and working conditions imposed.
The 1999 round of negotiations promises to be a rocky one, with neither binding arbitration or legal strike as an option. Is this truly collective bargaining?
I would like to quote from the former Clerk of the Privy Council's fifth annual report in 1998 to the Prime Minister, in which she stated:
With all the power and authority in the world, one cannot `command and control' creativity and innovation. One cannot `order' new results to emerge. A new approach to management is called for. This approach requires a climate of trust, encourages collaboration and favours inclusiveness. It recognizes the importance of sharing power in exchange for having everyone gain a greater sense of collective responsibility.
The era of command and control has been drawing to a close for some time. In 1992, via the Public Service Reform Act, the Public Service Staff Relations Act was reviewed and amended. No alarm bells were sounded about the insufficiency of the PSSRA to protect the public interest. Both the arbitration and conciliation/strike routes were confirmed as part of the collective bargaining "rules of engagement." It is time to respect those rules, if the rule of law is to have any meaning to federal government employees.
We have a fairly straightforward and simple recommendation for your committee, Mr. Chairman. It is to delete clause 19(1) of this bill. Reject penalizing those federal employees for whom the arbitration route is the only effective recourse option. Suspension of arbitration can only increase dissension in the public service and the likelihood of confrontation. Recent events in Newfoundland and Saskatchewan confirm this reality. At a time when cooperation and partnership is essential, this amendment will not contribute to constructive labour relations in the federal public sector.
Bill C-71 is evidence that the government still does not understand or accept the need to address the pressing needs of the public service as outlined in the report of the Standing Senate Committee on National Finance. Both this bill and its sister bill, Bill C-78, continue on the path of managing by legislation. Bill C-78, if passed unamended, will legislate an increase to pension premiums with a corresponding reduction in take-home earnings, while removing accumulated surplus in the pension plan which was built up, in part, through employee contributions.
These bills are morale crushers and will further alienate staff, worsening the problems identified in the Senate committee's report.
The public service of Canada has reached a critical juncture in its history as a professional, non-partisan institution capable of serving all Canadians. This decade has exhausted any remaining equity within its workforce. It is now a priority to reinvest or risk losing its status as a world-class institution.
Our members chose their careers in the public service motivated by a belief that they could contribute to the economic and social well-being of Canadians. A decade of mismanagement of the public service has shaken this ethos.
Once again, reliance on more legislation to determine conditions of employment is an unconscionable abuse of the government's authority. The legislative review of Bill C-71 provides a rare opportunity for you to take action to effect a remedy consistent with your earlier report. I urge you to exercise your prerogative and to remove the proposed section 19(1) of the Budget Implementation Act, 1999.
Mr. Chairman, we are available to answer questions.
The Chairman: Before you, Mr. Hindle, we heard from Mr. Tony Valeri, the Parliamentary Secretary to the Minister of Finance, who explained the continuation of this measure to 2001. When I asked him about this, he said -- and I would have to check the record to be exact -- that they are still trying to achieve the keeping in place of a balanced budget. This is despite the fact that revenues have climbed dramatically and surpluses are in the range of $10 billion and likely to increase over the next two or three years, all things being equal with the economy, to a potential $15 billion.
Has anyone in the Department of Finance sat down with you to discuss what the overall intent is in terms of the restructuring of the civil service? Have they sat down with you and said, "Look, this is a necessary phase which we are going through. However, having gone through this, we expect we will have achieved a certain balance. We recognize that you have put up with a great deal, and what we will do through this restructuring of the civil service is afford you opportunities to grow." Have they done that?
Mr. Hindle: Officials from the Department of Finance have not made any overtures to try to explain it. If this is a phase that the government is going through, then it is a pretty prolonged phase and is probably more aptly termed an "era." Let us call it what it is -- it will be a decade from 1991 through 2001. There have been seven interventions in those 20 years. That covers 16 years out of 20. This is a pretty prolonged phase. It started with previous governments, obviously. They talked about needing a balanced budget. They talked about much the same thing back in 1991, when they imposed the first zero per cent on the public service, and provided 3 per cent the year following. That was not good enough -- they imposed four more zeros following that.
It seems to me that this government is now afraid that an arbitrator will take a look at what has gone on in the past and will determine that what has gone on in the past is unfortunate and in need of remedy. I do not think it will be an extreme remedy, if it were to occur, and I still believe the collective bargaining process can work. We have shown that it can work without strikes.
It seems that they are afraid to allow their policies and their practices with regard to compensation in the public service to be reviewed by an independent third party. I use the word "independent" advisedly because there is a fair bit of control over who can and who cannot be an arbitrator.
It also presupposes that their arguments to that same arbitrator would be insufficient for them to come up with contract settlements that are similar to what they are getting through the rather coercive nature of collective bargaining now. In other words, they do not want to have their positions scrutinized.
There certainly is an impression from the bargaining agents, and definitely from the professional institute, that they believe that their approach and their offers cannot stand up to the scrutiny of someone outside government. Thus, they will not allow it.
Our concern is that this extension by two years is merely the beginning of the end of arbitration, period.
If a number of employees do not have the right to withdraw their services and do not have recourse to some other method of resolving a dispute, and that economic lever is used in negotiations, you will have protracted negotiations that will leave people very bitter and very disillusioned. Frankly, that is one of the things that is prompting us to find other mechanisms to provide service to our members, particularly providing them with the opportunity to seek employment outside of the federal public service.
The Chairman: There has been no meeting of minds, as it were. You are saying that, if they propose to do this until 2001, they are only putting off a fairly significant problem.
Mr. Hindle: Definitely.
The Chairman: If they put off that problem until 2001, the likelihood of them putting it off again is fairly high. I asked how long this would continue. The response from Mr. Valeri was that he could only speak to 2001. That sounds familiar.
In 1991, we were in a severe recession and had budget deficits. That is not the situation now. My concern is that, although we no longer have those things, the government still insists on doing this, with no light at the end of the tunnel.
Has the government indicated that it is trying to restructure or to do something specific?
Mr. Hindle: We have heard nothing like that. They have not made any overtures to explain it. Frankly, even if the Minister of Finance himself told me that this is the last time, that in 2001 arbitration will come back, I cannot say that I would believe him. In the federal election campaign of 1993, the party in power was clear that it would return to collective bargaining. They failed to tell us that, before they returned to collective bargaining we would have two more years of zero per cent plus two more years of frozen increments. They did return to collective bargaining, but only after two more years of freezing public service employees' salaries. When they did return, they imposed restrictions on arbitration. That is when we lost it for the first three-year period.
It is now time for them to return to life the way it should be under the Public Service Staff Relations Act and live by the rules Parliament set when it passed that legislation and when it reviewed it in 1992 and retained arbitration as a method of resolving disputes. We think those rules should be followed for this round of collective bargaining. It is time for the government to live up to the commitment that is in the legislation which Parliament has already passed.
Senator Bolduc: I think the federal government wants to continue for two or three years, as it proposes in the bill, because of a new classification plan. They will go from approximately 72 groups to 29 groups. That is the type of thing that we started in Quebec in 1966. We will finally go to professional engineers, accountants, lawyers, et cetera.
The technical argument is that we must have that new classification plan, otherwise we will not know exactly what will happen to salaries, taking into account that they must also obey human rights law with regard to salary parity. That is the technical reason. Then they say that, if they do not have that, they cannot control the cost, and it is impossible that the budget be done outside the office of the Minister of Finance or the President of the Treasury Board.
I was on the other side in Quebec in those days. We had to go through that classification plan too, but we did it in three or four months. Of course, it was based on studies done over two or three years, but we finally had to do it and we did it. It is still working, by the way.
However, at the time it was a very solid argument: They had to do it, otherwise it would be impossible to negotiate and know the cost of it.
Do you think that this is a must? We have heard of this classification plan for a good many years in this committee. We have done two studies on the civil service, the last one under the distinguished chairmanship of Senator Stratton. Before that, we did a study in 1988 or 1989.
It seems to me that these issues are not very complicated, but the decision to act has taken a long time. Professions are well known in our society. By that I mean that a biologist is a biologist; a doctor is a doctor; a lawyer is a lawyer. There are different kinds of engineers of course but, overall, these are not difficult questions to resolve. It seems to me that there is something wrong in the process.
Mr. Robert McIntosh, Policy Advisor, Professional Institute of the Public Service of Canada: Section 7 of the Public Service Staff Relations Act, as it now reads, gives the employer authority to determine classification. Therefore, they do not need the suspension of arbitration to accomplish the introduction of a new classification system.
Senator Bolduc: It seems the process is not complete. Why does it take five years to do that?
Mr. McIntosh: The employer is developing its classification system to be introduced into the public service. It is not a factor that arises from collective bargaining. It is done unilaterally by the employer by virtue of section 7. It is really a diversion, a red herring, to say: "We are bringing in this new classification system and, therefore, we must suspend arbitration." They are not related. They are not connected. They already have the authority to do it under section 7.
Senator Bolduc: I know what you mean but, viewed from the management side, it sounds reasonable to do the classification and then to negotiate. If you negotiate before, you must negotiate with the 72 groups, and that would be very difficult.
Did you have discussions with them about the fact that it takes five years to do that? It is a job that is possible to do it in six months or a year.
Mr. Hindle: It will be more than five years by the time they have completed it. They started this as a result of the human rights complaints filed in the late 1980s. It has been more than five years already, and they can continue to use the excuse that they are implementing the universal classification standard and therefore cannot have arbitration.
All of those arguments fail to recognize that, when it comes to an arbitral award the government does not like or does not think it can afford, the government has recourse that no other employer in this country has, unless they are also a legislative body. The government has recourse, through Parliament, to introduce legislation to roll back or alter the arbitral award. That is a very unfortunate thing to do.
Senator Bolduc: I have lived through that once. It is not a positive thing.
Mr. Hindle: We lived through it as well. There were public service strikes in September of 1991. In addition to the Public Service Alliance, the auditors and the computer systems professions were on strike. The government imposed a settlement to the contract and also rolled back the arbitral award that had been given to our law group. They did not implement it.
The government itself is on record as having said that they are not out of line with reality, but the government does not want to recognize that it has the ultimate authority through Parliament. It is an authority that we do not think they should use, except in extreme cases, but they will not acknowledge it. Instead, they are trying to pre-empt the process and remove a process called arbitration that would allow for the resolution or the negotiation of a dispute without recourse to a strike, because, in many cases, the people we represent do not have the right to strike legally.
Senator Cools: I would like to take up one or two issues with the witnesses. It seems to me that they have some concerns. It seems to me there is a place for those concerns to be raised and aired. I am not particularly convinced that this is the appropriate place to have raised those concerns. What we have before us is Bill C-71, to implement certain provisions of the budget tabled in Parliament on February 16, 1999. The witnesses are asking us to delete a pretty important and significant clause of the bill.
I am asking the witnesses: Are they really serious?
Mr. Hindle: Absolutely. If this is not the forum or the place to raise these concerns, I would be interested, senator, in hearing where you think the appropriate place is to raise these things when the government introduces legislation.
Senator Cools: I am asking the questions.
Mr. Hindle: I am confused. I see this as the appropriate place.
Senator Cools: I will put the questions again. This is a bill to implement provisions of a budget.
Mr. Hindle: Yes.
Senator Cools: What about your responsibility, then, as public servants, to support the government on these kinds of issues?
Mr. Hindle: My responsibility is to the more than 30,000 members who voted to elect me as their president. I took a leave without pay from the public service in order to do this. It is my responsibility to represent them in front of those people who have to make the decisions, be they senior departmental or Treasury Board officials, or members of Senate committees or committees of the House of Commons when you are trying to decide on enacting legislation that has a direct impact on my members.
This has an impact because it affects their employment relationship with the Treasury Board of Canada. In my opinion, it has a detrimental impact on the relationship between public service employees and the Treasury Board, because it does not allow for a peaceful resolution of a dispute, if one arises, in the collective bargaining process.
Senator Cools: I submit, Chairman, that, if this bill does not carry, there will be a far larger impact on the public service than anything the witness is suggesting.
Having said that, I move, seconded by Senator Fraser, that we move directly to clause-by-clause consideration of Bill C-71.
Senator Lavoie-Roux: Not tonight.
The Chairman: We have one more witness to hear tomorrow morning.
Senator Cools: Nevertheless, I move that we do it tonight.
The Chairman: But we have another witness to hear.
Senator Cools: Mr. Chairman, no one consulted me on setting the witness schedule. I was not consulted on any of this.
The Chairman: This is the a normal course of events. There are only three witnesses.
Senator Cools: I do not even know who they are. You have not asked for the committee's agreement to hear --
The Chairman: The point being --
Senator Cools: Let me finish, Chairman.
The Chairman: We were quite content to have Mr. Valeri here, without a concern. We went through the questions.
Senator Cools: We have a process whereby we are supposed to determine committee meetings and what witnesses will be called.
The Chairman: I would have expected that you would have received notices as to who was attending. If you did not, I apologize.
Senator Cools: I am not talking about notices, Mr. Chairman. I am saying that our side has not been consulted in the scheduling of these meetings, or in the calling of witnesses. I submit it is very important. Perhaps we should excuse these witnesses while we discuss this matter.
The Chairman: These are requests from people who wish to attend.
Senator Cools: I would be happy to receive those requests and to consider them in a democratic way. Could we excuse the witnesses?
The Chairman: I would have expected you to cooperate, because we were trying to cooperate on our side, to get this bill dealt with quickly so that it could be reported to the Senate as quickly as possible. That was the intent. Surely we could take the time to hear three witnesses. What is the issue here? I am not lining up 20 witnesses. These people requested to appear before us. Are we supposed to say no?
Senator Cools: I did not say that.
The Chairman: That is what you are implying by your comments.
Senator Cools: I am not implying anything, and it is quite out of order for you to be questioning my motivation.
The Chairman: But you are questioning mine.
Senator Cools: No, I am not. I am saying we have a process by which we are supposed to make decisions.
The Chairman: I apologize. I thought you had received the notice.
Senator Cools: I am not talking about notices. I am talking about the decisions as to when we will meet, how long we will meet, and which witnesses we will hear. Our side has not taken part whatsoever in making the decisions as to how many meetings we will have and what witnesses we will hear. You have told me, Mr. Chairman, what you are doing.
The Chairman: First, you were not around.
Senator Cools: I am always around. Wherever I am, there is a telephone.
The Chairman: Second, we have scheduled three witnesses over two days. We can report the bill tomorrow.
Senator Cools: Who are the witnesses for tomorrow?
The Chairman: There is one witness.
Senator Cools: Did they ask us, or did you ask them?
The Chairman: They requested to appear. For goodness' sake, it is only one more witness.
Senator Cools: I want to know, Chairman, did you invite them?
The Chairman: I will not go through this again. There were requests to appear by the various associations. If we are going to argue about this, then I should excuse the witnesses.
Senator Cools: Let us discuss this right now.
The Chairman: The Social Sciences Employees Association is scheduled to appear tomorrow at 10:45. We can have the bill dealt with by 1:30. That is what I am suggesting. We are trying to cooperate and get this done. That was what you wanted. That was the message from you to me concerning this. You said, "Let us get this done because we have a lot on our plate," and that is what I am trying to do.
Senator Cools: I would like to proceed in a proper and orderly manner.
The Chairman: I understood that you had been given a draft list of the witnesses.
Senator Cools: I did not make myself clear enough. I do not want to be told what is happening. Our side is supposed to be involved in these decisions. We have a steering committee for that purpose.
The Chairman: You are quite right. I am not disagreeing with you. I am simply asking: Do you really want to get into this kind of debate over three witnesses, two of which requested to appear? Do you want to hold me hostage for that?
Senator Cools: I am certainly prepared to do that, because you are holding me hostage.
Senator Lavoie-Roux: I move that this meeting be adjourned and that we reconvene tomorrow.
Senator Cools: No, overruled. Who are the witnesses for tomorrow?
Senator Bolduc: You received the information, as we all did, that tomorrow we would hear two witnesses.
Senator Cools: I thought we had sorted out the process by which we make decisions. Who made those decisions?
Senator Bolduc: I do not want to discuss this further. You are not being reasonable.
Senator Cools: I am very reasonable.
Senator Bolduc: Behave.
Senator Fraser: Was a meeting of the steering committee called on this matter?
The Chairman: We were trying to deal with this bill and the steering committee did not have time to meet. I certainly did not have time. Would you have had time to attend such a meeting, Senator Fraser, had one been convened?
Senator Fraser: I am not on the steering committee.
The Chairman: When did we have time to meet? Tell me.
Senator Fraser: Since we came back to town on Monday.
The Chairman: There are only three witnesses on this bill.
Senator Fraser: Surely there was time for at least a telephone conference call of the steering committee.
Senator Lavoie-Roux: I have been to many committees when I am presented with a list of witnesses either before or during the committee meeting.
Senator Cools: I can put it the other way, too. I have never known a committee where the chairman and the clerk believe that they alone are to make decisions on what meetings are to be organized and which witnesses are to be called. If it is a first for you, it is also a first for me.
My understanding of the system is that it is a joint process as to witnesses to be called and when meetings are to be scheduled.
I am quite serious. If we are expected to maintain bodies and positions, the minimum we should know is how long we will be sitting and where.
Senator Lavoie-Roux: We will be sitting tomorrow at 10:45 to hear the last witnesses.
The Chairman: And to deal with the bill.
Senator Cools: Mr. Chairman, you cannot just overrule motions. There is a motion on the floor.
The Chairman: I am not overruling a motion. I am suggesting and asking that we deal with the witnesses tomorrow morning, proceed to clause-by-clause consideration afterwards, and it will be done with. Is that unreasonable?
Senator Cools: I am prepared, then, to withdraw my motion.
Could we proceed properly? Could I have agreement to withdraw?
Senator Moore: Agreed.
Senator Cools: We can hear those witnesses tomorrow.
Senator Lavoie-Roux: I move that we adjourn.
Senator Cools: There is a motion on the floor, and it has to be disposed of first.
Senator Fraser: As a seconder to that motion, I wish to make one point. It is only a matter of weeks, after much debate and distress, since we agreed to establish a steering committee process. This difficulty would not have arisen if that process had been followed.
I do not want to be an obstructionist in the work of the Senate or of this committee. That is not what we are here to do. That is not what we are paid to do. However, it is absolutely vital that the steering committee process be respected from now on.
The Chairman: My apologies for this. I had thought that notice would have gone out indicating who the witnesses were to be.
Senator Fraser: The steering committee makes that decision before the notice goes out.
The Chairman: I understand that.
My suggestion is that we send out a list of the proposed witnesses and ask for agreement on who is to be called, rather than holding a meeting. That is all I am getting at.
Senator Cools: No, Mr. Chairman, we do not function that way. It is called a "steering committee on agenda and procedure." I do not think we need to explain to anyone here what steering committees are supposed to do.
I do not like being presented or painted as being unreasonable. I would have been quite prepared to hear 12 witnesses, once we had been told who wanted to be heard.
Perhaps we can move a motion to instruct the clerk that we, on our side, are to be informed at all times.
The Chairman: Yes, Senator Cools, that is a far better motion. I completely agree.
Senator Cools: I will not attend any meetings which I am not informed about or consulted on.
The Chairman: Your are absolutely right, and I do not blame you.
I have a document from CIDA entitled "Performance Report." It gives us a description of their work. Do you want copies in order to deal with the next meeting?
Senator Cools: Sure.
Senator Moore: No committee has more meetings than Legal and Constitutional Affairs, of which I am a member. I am a member of that steering committee and we meet regularly.
The Chairman: Given that there were only three witnesses, I had thought that you would receive notice and make comments. That is all. I simply do not like to have meetings if there is no need for them. Hereafter, the clerk is under clear instruction.
Senator Fraser: I want to be clear on those structures. I do not want to receive any information that has not been decided upon by the steering committee.
The Chairman: Is there a motion for adjournment?
Senator Lavoie-Roux: I presented one earlier, Mr. Chairman.
Senator Cools: Let me make the point again that we expect this committee to run in a certain way. It should run by consultation as to meeting schedules and witnesses. We should not merely be informed. It is simply not good enough to say that the clerk is sending us a notice.
I say this very clearly to you, Mr. Clerk. We expect to be involved in making the decisions as to how, where and when this committee meets and whom it hears. I am quite prepared to listen to 12 witnesses.
For the sake of the record, since all of this is on the record, I do not like being portrayed as unreasonable or to be accused of being unreasonable in the instance of raising basic, common, ordinary, decision-making systems. This is a Parliament and this is a committee. As such, we are supposed to proceed in a certain way.
This is a budget bill, so it makes it a little bit interesting and a little bit important. I do not think it is entirely proper that a budget bill proceed with sets of witnesses on one side and without balance on the other.
The Chairman: Wait a second. The minister's representative was here.
Senator Cools: I shall not be coming to any meetings of this committee unless I am consulted and if I do not know who the witnesses are.
The Chairman: That is on the record.
I want to deal with the logistics of this matter before we adjourn.
Requests come in constantly from witnesses, and some at a very late date. In our subcommittee, we generally outline what witnesses we want to hear, and then, not through meetings necessarily, we set the direction of what the committee will study. We have described in reasonable terms where we are going. That is the general consensus reached by the subcommittee studying emergency preparedness and disasters.
With respect to this committee, the main committee, we will send members a list of suggested witnesses.
Senator Cools: I expect that.
The Chairman: We will list specifically that they have requested to appear.
Senator Cools: Who is the "we" sending a list?
The Chairman: The clerk will send you a list of the record of witnesses who have requested to appear.
Senator Cools: I expect that before any decision is taken to hold a meeting or to hear a witness, the steering committee -- meaning the chairman, myself and someone else -- will make the decision.
The Chairman: Can we do that by phone?
Senator Mahovlich: Who makes the decision about which witness is heard first?
Senator Cools: That is the issue. That is the job of the steering committee.
The Chairman: Traditionally, the government representatives are heard first.
Senator Cools: There is a system. The parliamentary secretary will appear first and then other witnesses will follow. The decision as to the order of the other witnesses is one on which we must consult.
The Chairman: To avoid the meetings, there will be a suggested list. It will clearly outline who has requested to attend. There will be a subsequent conference call to determine who the witnesses will be. That is the process we will follow. If it requires further discussion, then we will hold a meeting.
Senator Cools: Mr. Chairman, some of these things could be solved easily by you calling me. For example, you could call saying that we should have a meeting on X, Y, and Z and that we have applications from certain witnesses to come. I would then say, perhaps, that I have A and B witnesses as well. It is easy to do and has been going on for quite some time.
The Chairman: We will adopt that process. By the way, that does not preclude the calling of any additional witnesses. We still have time.
The committee adjourned.