Proceedings of the Standing Senate Committee on
National Finance
Issue 40 - Evidence
OTTAWA, Wednesday, May 29, 2002
The Standing Senate Committee on National Finance met this day at 5:50 p.m. to examine the Main Estimates for the fiscal year ending March 31, 2003.
Senator Lowell Murray in the Chair.
[English]
The Chairman: Welcome, colleagues and witnesses.
[Translation]
The Senate has asked us to study the Main Estimates for fiscal year 2002-2003. We have with us this evening the Honourable Lucienne Robillard, Member of Parliament for Westmount—Ville-Marie and President of the Treasury Board for three years already.
[English]
Accompanying the minister this afternoon are Mr. Richard Neville and Mr. Bickerton of the Comptrollership Branch.
Minister, our committee has already had an informative meeting with your officials; however, we are pleased to welcome you here tonight and invite you to begin with what I understand is a brief opening statement.
[Translation]
Ms Lucienne Robillard, President of the Treasury Board: It is a pleasure to be with you this afternoon to discuss the Government's Main Estimates for 2002-2003. I have with me today Mr. Neville and Mr. Bickerton, whom you know well, because they have appeared before you on a few occasions over the past few months.
Let me begin by saying that the events of September 11 have had an effect on government spending. The December 2001 Budget announced a comprehensive package of security-related initiatives totalling $7.7 billion over six years, of which $1.5 billion will be spent in 2002-2003.
The Main Estimates reflect $613 million of these initiatives, including increased investment in air travel safety, intelligence and policing, emergency preparedness, military support, more efficient screening of immigrants and refugees, and enhancements to Canada's border operations and infrastructure.
However, the government remains committed to the rigorous stewardship of public resources. Even with these unforeseen expenditures on new security measures, we have managed to maintain a surplus.
In fact, our finances are the envy of the world. The government has managed to balance the books during difficult economic times. In the last five years, we have posted five straight budget surpluses, making Canada the only country among the Group of Seven industrialized nations that's in the black.
Our forecast for this year is another balanced budget or better, and just a few weeks ago, Moody's Investor Services restored Canada's Triple-A credit rating. Not only that but the economy is growing. This is the result, in part, of the government's balanced, prudent approach to managing its finances, along with our fiscal strategy and the strong measures we have taken to promote economic growth. It has planned properly and invested strategically. These investments for 2002-2003 are reflected in the Main Estimates being presented today.
[English]
The Main Estimates for 2002-03 amount to $170.3 billion, which includes $168.3 billion in budgetary spending and $2 billion in non-budgetary expenditures. They are consistent with and reflect the bulk of the $172.9-billion expenditure planned for 2002-03 set out in the December 2001 budget. The balance of some $4.6 billion provides for further budgetary adjustments to statutory spending or for spending authorities that will be sought through Supplementary Estimates.
This year's Main Estimates show a growth in total spending of $5.2 billion over last year. Of this amount, $5 billion, or 96 per cent of the increase, relates to budgetary spending.
Canadians have worked hard to build a society based on compassion and fairness. We will maintain that tradition by continuing to ensure a high standard of health care. The increase of $1.3 billion for the Canada Health and Social Transfer to the provinces does that. Time and again, Canadians have identified health care as their top priority. This government is committed to a health care system that works, and it is looking forward to the final report of the Commission on the Future of Health Care in Canada to help evolve the system in line with the changing needs of Canadians.
Under the Infrastructure Canada Program, for example, transfer payments of $348 million will ensure that Canadian communities have the opportunity to maintain their infrastructure and enhance the quality of the environment.
These increases represent investments in the priorities Canadians have identified as essential to the protection and maintenance of their quality of life.
As you know, I tabled the Main Estimates on behalf of the government on February 28, 2002. In addition, as President of the Treasury Board, there are some expenditures that relate specifically to the secretariat for which I am responsible. For 2002-03, the Main Estimates for the Treasury Board Secretariat amount to just over $2.1 billion. This represents a marginal increase of $67.6 million over last year, the majority of which relates to increases for public service insurance and for operating expenditures.
As the management board of government, the Treasury Board Secretariat is bringing in new measures that allow us to fulfil our mandate and the commitments we made in ``Results for Canadians.'' These measures are investments in government-wide initiatives to create a public service that is more citizen-focussed, values-driven, results-oriented and committed to responsible spending — a public service that will meet the needs of Canadians as we enter into the twenty-first century.
The transfer of the leadership network to the Treasury Board Secretariat from the Privy Council Office was the first step in advancing the government's public service reform and modernization agenda. This accounts for most of the increase in our operating expenditures over last year.
We have established the Office of the Public Service Integrity Officer, which will support our policy on internal disclosure, in which I know this committee has an interest. It will provide a confidential and neutral forum for employees who come forward to report cases of wrongdoing.
[Translation]
In addition, we are strengthening our internal audit and evaluation functions. This year and the next we will also be implementing our modern comptrollership initiative government-wide. It will give us better performance information, sound risk management and appropriate control systems.
We are also moving ahead with the modernization of Human Resources Management to ensure the Public Service is the employer of choice among job seekers. Government On-line continues to be a top priority. The target date for getting services on-line is 2005, and we are making excellent progress towards that goal. In fact, the business-consulting firm Accenture has ranked Canada first in the world for two years in a row for e-government leadership.
In these Estimates, we are also seeking authority for $750 million for Vote 5, the Government's Contingency Vote. I know this committee has been studying the use of Treasury Board Vote 5, and you have had my two colleagues at the table appear before you several weeks ago.
I also know that you have been made aware that the guidelines for the use of Treasury Board Vote 5 are being reviewed. With this review, we hope to further strengthen the management of this Vote to ensure it is being used in the most judicious manner. I am certain the comments and recommendations of this committee will be most helpful.
I would like to assure you that, as a government, we are continuing to improve and to give ourselves the necessary tools to properly and effectively spend taxpayers' money in a way that will enhance the quality of life of all Canadians and improve our general economic prosperity. We will pursue this balanced approach to investing in the priorities that matter most to Canadians, while implementing proper controls to ensure we do so in a responsible and sustainable manner. My colleagues and I will now be pleased to answer your questions.
Senator Bolduc: Our committee looked very seriously at Vote 5. A study was conducted in 1989 or 1990. It is an important subject because the government wants some leeway to improve government efficiency and to ensure ministerial accountability to Parliament. We were involved in drafting the report. I cannot share the results with you because it is not yet completed. Before changing, if need be, the wording or guidelines for Vote 5, I would ask you to wait for the tabling of our report so that you can benefit from the committee's comments.
Ms Robillard: I would like to hear your comments. We made a commitment to review the guidelines in our response to the Auditor General. Am I to assume, Mr. Chairman, that we will get the report before the end of the parliamentary session?
The Chairman: Yes.
Ms Robillard: We will certainly wait for your report.
Senator Bolduc: I would like to congratulate you on the document you sent us on social indicators. Those macro- economic indicators are not departmental performance indicators. They are in the performance reports. Some of the indicators are not particularly favourable. Overall, they are quite complimentary. That is to be expected from a government report. Some are cause for concern, such as those on innovation and the efforts made in that regard. There is a lot of work to be done if we compare ourselves to other OECD countries, as you indicated on page 11 of your report. There are also the gaps mentioned on page 10 with regard to Canada's productivity plan compared to that of the U.S. We take your documents very seriously.
My first question is on the estimates for the Canadian Broadcasting Corporation. We know that there was a two- month strike at Radio-Canada. The entire network is to receive approximately $1 billion, but that is not indicated here. You are giving Radio-Canada $300 million or $400 million. I am not sure whether that is a third or a quarter of the budget. Will you withhold the funds for the two months during which the people did not work? We did not get any service. When people do not render a service, you cannot give them the same amount of money. There has to be a minimum of accountability.
Ms Robillard: The Canadian Broadcasting Corporation presents its corporate plan to Treasury Board on an annual basis. It presents its corporate plan. We review all of it, including capital expenditures, etc.
Indeed, there is a budget problem with payroll costs, for example, since there was a strike ``lockout.'' I use the two terms because the two situations occurred in the situation we are discussing. CBC's board of directors must review its entire budget.
Mr. Neville: The fact that there was a drop in revenues must also be taken into account. There is an annual review. If, at a later date, an adjustment is required, that will be taken into account. But you have to look at the entire annual plan. In that context, we are continuing with the payments subject to future adjustments.
Senator Bolduc: It is not a lump sum, as it is for foundations. There is true accountability. The Minister, Ms Copps, must answer questions in the House with regard to the $915 million that represent an operating expenditure. I am not referring to capital expenditures. Normally, there would be a departmental or parliamentary review of the amount awarded, given the circumstances.
Ms Robillard: Exactly. You did not ask any questions about the horizontal performance of the criteria in the report. I must say that this is the first time that Treasury Board has published such a horizontal performance study. We are open to comments for improving next year's report. My team consulted some members of the House of Commons who are interested in this subject. They made some very interesting comments on improving the report you have before you.
Senator Bolduc: We have the report of the Senate committee that reviewed problems at Defence. It found that the budget of the Defence department is perhaps not what it should be, if we compare the percentage of our GDP that is earmarked for defence to that of the OECD countries and that of the other NATO countries. I understand that a House of Commons report will state that the department's budget shortfall is between 3 and 4 billion dollars. It is well known that the armed forces are poorly equipped. I am not referring only to the fact that we have 57 000 people in the armed forces. There is an infamous shortage of equipment in the case of helicopters and other equipment, such as bombers, is getting very old. I understand that since the budget covered the period ending in November or December 2001, you could not look at everything. Do you have the impression that there will not be a supplementary budget for Defence?
Ms Robillard: It is very difficult to tell you that today.
Senator Bolduc: But six months have gone by since that time. You have reached your cruising speed. It is easier to assess these things in May.
Ms Robillard: You say that a Senate committee report has been tabled. It must have been sent to my colleague at the Defence Department. There will be a report tabled shortly in the House of Commons. We will be reviewing them carefully. My colleague, the Minister of Defence, has announced a review of the DND mandate in the context of the foreign policy review. As you know, my colleague, Bill Graham, is reviewing our foreign policy, as is my colleague who is responsible for international aid, as well the Minister of Defence.
It will be important to assign a mandate to the Department of Defence, and the budget will be in keeping with that mandate. The members of the committees looked into these issues for these reasons. Mr. Neville will add something regarding the Supplementary Estimates.
Mr. Neville: The Supplementary Estimates (A) are tabled in Parliament around November. This is the month of May. There are still a few months before we finalize what the Supplementary Estimates will contain. It is a little early to think about this issue specifically. At the end of the summer or in early fall, we will be able to finalize the documentation for the Supplementary Estimates (A) for their presentation to Parliament. Subsequently, the estimates could be studied by this committee. We will not be able to discuss this issue in any depth until November or December.
[English]
Senator Banks: I want to first ask Senator Kinsella whether he will ask about his whistleblower bill today.
Senator Kinsella: No, I am not planning on it.
Senator Banks: May I?
Senator Kinsella: Please proceed.
Senator Banks: We have had some interest here and elsewhere in a bill that has been put forward by Senator Kinsella that is sort of on hold at the moment. As I understand it, that is, in part, because of a suggestion that the policy that you are about to bring forward or have brought forward with respect to what I will colloquially call whistleblowers would suffice.
Others and I have been concerned about the degree of protection that is given to someone who acts in that way. Would you please comment on what you see as the equality of protection of the interests of a person who might blow the whistle between, on the one hand, an act that specifically provides that protection and, on the other hand, a policy that is subject to easier change.
Ms Robillard: Senator, that brings me to the discussion that we had around this table last year, after Senator Kinsella tabled the bill. At that time, I indicated that we were thinking about a policy. Since then, we set out a policy, which came into effect in November, if I remember correctly. I do not have it with me, but the policy can be accessed through our Web site. We now have a policy on internal disclosure, as we call it — not whistleblowing — and we have even hired the integrity officer.
Senator Banks: That was my next question.
Ms Robillard: Dr. Keyserlingk is already in place as the first Public Service Integrity Officer. His office is in place. He started officially to receive complaints at the beginning of April 2002. I am told that he has between 30 and 40 demands at present. Since the policy came into effect, he has met with many people, internally and externally. There have been many meetings with employees, managers and clerks to inform people about his role. Dr. Keyserlingk has vast experience on values and ethics, and he was ready to accept this challenge.
After a period of time, we will receive his evaluation as to whether we have the right process in place. As such, it is premature for me to tell you whether it is working or not working. Dr. Keyserlingk is looking at the protection of individuals' privacy right now. He is also consulting with legal advisers to be sure that we do not have any legal problems with the policy. He recently asked for a delegation of authority vis-à-vis the privacy and access to information legislation, and I signed that delegation of authority to Dr. Keyserlingk. We will see how it will work in the months to come. I am sure that you will follow that closely.
Senator Banks: We will. I am pleased to know that the office is established and is up and running.
My second question concerns the National Capital Commission. We will be meeting with representatives of that commission. I have a concern that they seem, on the face of it, to be developing, leasing or selling some of their assets for some purpose or other. I note in the Estimates an increase of some $3 million in operating costs and some $10 million in capital costs for the NCC.
I am wondering whether in the NCC's business plan submitted to you they indicated whether the amounts contained in the Estimates, added to the previous grants to them, were sufficient to conduct their business. Did they say anything to you — this would help us in advance of speaking with the NCC — about whether they were planning to divest some of their assets to obtain operating money?
Ms Robillard: The National Capital Commission presented their corporate plan to the Treasury Board. In the plan that was approved by the board, there was an understanding that they were selling lands that had been identified as non-strategic lands. I am not aware that they came back recently to the board to ask us to change anything. Perhaps I will ask Mr. Austin, who is in charge of that file in my secretariat, to add something.
Mr. Bill Austin, Assistant Secretary, Social and Cultural Sector, Treasury Board Secretariat: They have not come back to the Treasury Board in the last six or seven months. The plan came in, as memory serves, at the beginning of the calendar year. That is an annual event, as the president has mentioned.
Mr. Neville: The sales have been at market value and the proceeds of the sales are in line with our surplus lands policy.
Senator Banks: When they present their business plan to you and the representations of what they will do — I am asking for this information to assist us in our later meeting with them — is there an obligation on their part to justify, if that is the word, or to convince you that the lands that they are selling are surplus or non-strategic? It is almost a subjective judgment call as to whether this farm or that park is strategic or not. Do they make a justification as to what is superfluous to their needs?
Mr. Austin: Their corporate plan does not come in with that level of detail. This is a question that I think honourable senators should be addressing to the NCC. From my information, the plan has been drawn up for a number of years. I understand that that was done with considerable consultation with many stakeholders in the community.
The Chairman: In any case, we may wish to take a look at the policy guidelines that Mr. Neville referred to a few moments ago by way of providing some basis for our meeting with Mr. Beaudry in a week or 10 days' time. Perhaps Mr. Neville could provide those to us.
Mr. Neville: I will do that.
Senator Kinsella: As a supplemental on this topic, is there a Treasury Board policy that speaks to the issue of operating agencies such as the NCC that are at some distance operationally from the government? In selling their assets that they have control over and then keeping the revenue from that sale, do the proceeds go into that bank account or do they go into the Consolidated Revenue Fund?
Mr. Neville: Since 1992, in this particular case, the Treasury Board has allowed the NCC to sell the surplus lands, as I said earlier, at market value. That is very important. It allows them to use the proceeds to help fund their capital maintenance requirements and to acquire other essential property.
It is specific to the entity. In this case, this is how we have done it. In other Crown corporations, the proceeds are dealt with differently, depending on the Crown corporation.
Senator Kinsella: What does the literature in public administration indicate in terms of the pressure that that kind of policy places upon an operating agency, when they cannot obtain what they require through the Estimates or the appropriations, to sell an asset to do the other kinds of things?
I do not have the book in front of me, but I believe Parliament would be appropriating about $118 million. They are raising, are they not, an additional $30 million, or is it $12 million? I do not know the exact number, but it is a significant amount of money.
I am interested in this from a policy standpoint. Does that policy not place an operating agency under extraordinary pressure to sell off their assets?
Mr. Neville: Although Treasury Board policy is not applicable to them in that sense specifically, we do perform an annual evaluation because, through the Estimates, we do provide them with funding. In order to arrive at the amount that we include in the Estimates, a negotiation process takes place. Based on all of the facts before us, the government makes a decision as to what will be funded.
Senator Kinsella: As to how much will be sought by appropriations; correct?
Mr. Neville: Yes, but because we see the total plan, we factor in the total revenues and expenditures.
Senator Kinsella: The National Capital Commission Act provides for the government to take a decision to purchase assets, and that decision would be deemed to be a decision of the National Capital Commission. In other words, if there were an asset that the Government of Canada felt was in the public interest to be held by the National Capital Commission, a provision in the statute allows cabinet to make that decision. However, I do not find the other side of that provision in the statute. For example, if you were to find in your examination that an operating agency — the NCC or any other — was proposing in their plan to sell at a level of detail that you could understand the proposed sale and the government was of the view that the sale was not in the public interest, then that agency may not sell that piece of land.
From a policy perspective, do you think that principle ought to be in legislation, or is there some other Treasury Board policy that would achieve the same objective?
Mr. Neville: I am not sure of that particular policy.
Ms Roberta Santi, Associate Deputy Comptroller General, Comptrollership Branch, Treasury Board Secretariat: In terms of the real property policy of the Treasury Board Secretariat, the underlying principle behind surplus lands is that a department or agency must determine that it no longer requires a particular property for its program requirements. There must be an up-front determination that it is no longer required for program needs. Once that decision is taken, a detailed process follows.
A distinction must be made between whether the property is deemed to be a routine property or a strategic property. A strategic property is a property that, with some value added, can return increased value to the Crown. The first question for any department or agency to ask is this: ``Is a particular property surplus to program requirements?'' There is a process also to determine within the federal government if another federal department or agency requires this property for its program requirements.
Senator Kinsella: The government may take a different view from that of the operating agency that wants to sell the land, for example, an open piece of land that would be open to all Canadians and that the government deemed not strategically necessary. If it were sold, obviously it would not be available to all Canadians. If the government were of the view that it would not be in the public interest to sell that land, what is the process for the government to say no? Can the President of the Treasury Board veto it?
Ms Santi: I think largely it is when the circulation process happens as to whether the federal government requires this piece of property. There has to be some specific need for why the federal government wants to keep this property on an on-going basis. My sense is that if there is a strong case, there could be an opportunity to look at these cases on an individual basis.
Senator Kinsella: If the government were of the view, in respect of the Moffat Farm that borders on Mooney's Bay on the Rideau River system, that it was in the public interest of all Canadians for that property not to be considered excess and, therefore, sold — which is currently being proposed — could a directive be issued by the minister under the Financial Administration Act?
Ms Santi: I do not know about a directive being issued, but we could look at that process. I do not know the details around the Moffat Farm, so I cannot comment on it. We would also need to look at the level at which the NCC comes under the specific real property policy and the degree to which its legislation determines its compliance with the policy.
[Translation]
Senator Bolduc: My colleague referred to the federal government's power to purchase property. In practice, the federal government gave itself expropriation authority.
Does the federal government also have the authority to refuse to allow the National Capital Commission to sell properties? The legislation is not just about granting or adding to the discretionary powers of the federal government. The latter may expropriate property through the Commission, but the opposite should be possible as well. There may be strategic reasons for purchasing properties, just as there may be similar reasons for not selling them.
Ms Robillard: Was that included in the corporate plan?
Senator Bolduc: Probably not, because the problem did not exist at the time.
Ms Robillard: A few years ago, the federal government identified which property should be sold, and which should not be sold.
[English]
Ms Santi: Under this situation, the government could issue a directive to the Crown corporation not to sell the land, if a business case were there that should not happen. That potential exists.
Senator Bolduc: That is according to the Financial Administration Act.
Ms Santi: Yes.
Senator Bolduc: You have that power under the legislation.
Ms Santi: That is correct.
Senator Banks: If I recall correctly, you said that, if they do sell land that is surplus to their needs, the proceeds of that sale go into the coffers of the NCC, rather than returning it to the Consolidated Revenue Fund; is that correct?
Ms Santi: That is correct.
Senator Banks: A conversion could take place, whether it is actually paid out or transferred from book value. The Crown has made available to the NCC, at its cost at one time or another, a piece of land that the NCC could then, absent a determination from the minister that it ought not to, sell and convert into cash. That is the concern that we are talking about.
Do I understand that the President of the Treasury Board could, if she were convinced that it was wise to do so, preclude the sale of a piece of land that is owned at present by the NCC?
Ms Santi: The clarification is that the Governor in Council could do that.
Also, to clarify Treasury Board policy, departments cannot convert that into cash. The policy requires a reinvestment into real property. It could be used for maintaining their sites, but it must be ploughed back into the physical structures and properties that are within that portfolio.
[Translation]
Senator Bolduc: Would the directive come from the minister responsible for the National Capital Commission, and not from Treasury Board?
Ms Robillard: Exactly.
[English]
Senator Cools: I have been drawn into this particular exchange by this seductive intelligence of Senators Kinsella and Banks. I find I cannot resist.
On the question of the National Capital Commission, the minister spoke about properties that are strategic and properties that are in the process of declaring a property surplus. In her remarks, the minister made it clear that the decision to declare a piece of property surplus is a serious decision. Uncertain determinations of the public interest must be considered. Then Ms Santi continued.
Is the process by which a piece of property is declared surplus a formal one? Is it something that is recorded and written up? Is it something we can get a copy of?
For example, someone might decide tomorrow that Parliament Hill is such a valuable piece of land, one that could fetch a lot of money if condominiums were to be built on it. What I am trying to get at is this: What is the process by which a piece of property is declared surplus?
If any agency has the authority to make a declaration of surplus property, and at the same time the agencies tell us that they are under operating pressures to raise finances, it seems to me that many properties will be declared surplus for the simple purpose of raising operating expenditures.
Senator Banks: They cannot use that for operating expenditures.
Senator Cools: They are.
Ms Santi: Our experience over the last few years is that departments and agencies do not jump into this process quickly. The process is extremely onerous.
We should clarify the degree to which Treasury Board policy applies to which agencies and departments, but the process is onerous. The notification steps are set out in the policy. There must be formal notification. There must be a public notice that these lands are being declared surplus.
Before a department or agency even gets to that point, there is much internal work and many consultations and business cases that must be developed.
Senator Stratton: I should like to return to the Estimates, if I could.
Senator Cools: That is what we were on.
Senator Stratton: On June 11, the Minister of Finance will give us the budget or financial status update; is that correct?
Ms Robillard: I do not know.
The Chairman: He has announced that he will do it next week.
Senator Stratton: I will ask Mr. Neville, because he should know the numbers. What will the surplus be?
Mr. Neville: I do not have that answer.
Senator Stratton: I had to try.
That leads to my next question, with respect. In your 2002-03 Estimates, the payout expenditures are $15.9 billion for EI, as I understand it. I am curious to know what the surplus is expected to be for the coming fiscal year and what is the total surplus and how long will this policy continue to be used to allow the Minister of Finance to have a surplus?
Mr. Neville: The answer is this: Please be patient and we will publish the Public Accounts in September or October, somewhere in that time frame. We will have all of that information included therein. We have not yet closed the books for 2001-02 at this point.
Senator Stratton: I appreciate that, but you must have forecasts. What bothers me is the anticipation of what the surplus will be. That will be announced and be drummed as a huge surplus, but it will have materialized on the backs of the taxpayers paying EI premiums that get put into a surplus. That is how the Minister of Finance gets his surplus.
Mr. Neville: Mr. Chairman, as you are aware, the Office of the Auditor General has, time and time again, agreed with the approach taken on how we account for EI. In that context, we are accounting for it correctly. Therefore, what is in the Public Accounts will show the right numbers at that time.
Senator Stratton: I have heard that before and I am sure I will hear it again.
My next question relates to Public Works and Government Services Canada. That department has been in the news lately, particularly over three contracts of some $1.175 million.
Today, the Leader of the Government in the Senate informed us that Public Works Canada issues over 60,000 contracts annually. My question is this: How can the government defend a policy of appropriately managing more than 60,000 contracts under the one umbrella of Public Works? I find it incredible that that many contracts could be managed in that one department.
Perhaps you are not the person to answer that question. However, this is a policy issue for which Treasury Board is ultimately responsible.
Ms Robillard: Some people might say that it is better to have a centre of expertise for all the contracts that the government issues. I do not know if the number is exactly what you are saying. I do not have the numbers in front of me. However, we need a department of public works to do that job.
The concerns of the Auditor General were specifically in regard to the sponsorship program. The Auditor General has said that she will audit more broadly the publicity program and those pertaining to surveys and polls. There are three different programs involved here. They are for publicity, sponsorships and polls.
Often, departments choose to ask Public Works to help them with contracts. Over the years, our evaluations have been to the effect that they have done a fantastic job.
Perhaps my colleagues could add to that because they have experience in the department itself.
[Translation]
Mr. Neville: I used to hold the position of assistant deputy minister in charge of departmental services at Public Works and Government Services. However, before that, I was assigned to the regions of Quebec and Western Canada as the regional director for contracts.
In this context, there is a system of governance that is recognized as excellent, and for which a number of dimensions sometimes require some very specific expertise, namely contracts for the departments in question. There is also a division responsible for ensuring customer service and proper dealings with suppliers.
There have been some problems, but, generally speaking, the internal audit reports and the audits done by the Office of the Auditor General do not reveal any major problems.
[English]
Senator Stratton: The issue really is that over the years Public Works has consistently had problems, even when our party formed the government. For example, we brought in measures to provide that all engineering and architectural consulting contracts be done by way of competition. I think that took the politics out of that issue, which was the appropriate thing to do.
My concern is that this policy should be pushed forward to ensure that an issue like the Groupaction one does not happen again. The Auditor General's report concerning Public Works and this matter was pretty scathing. I am referring to the May report. Surely we can move in a direction whereby this will not occur again. I want the assurance from you that it will not.
Ms Robillard: When I met with the Auditor General about the special report she tabled on Groupaction, I asked her whether she thought we had the right policy and regulations in place right now or whether we should reinforce some parts of the policy. That is exactly what you are asking today. The Auditor General assured me that we have the right policies and regulation in place but that they were not followed.
Senator Stratton: Why?
Ms Robillard: That is another problem. On the side of policy and regulation, she said that she is satisfied with our policy. Publicity, sponsorship and polls are annexes and the policy applies in those cases.
Even though the Auditor General said that she is satisfied with our policy and regulations, you will have noticed that in the Prime Minister's speech of last week he asked me to look again at these three programs to be sure that we have the right policy and that we have received value for money and to report by September.
My colleagues in Treasury Board Secretariat are looking again at the situation. Perhaps the question to be asked is this: Is the contracting policy the right tool to use for those kinds of services? As you know, there are different policies in Treasury Board.
We will analyze that this summer and make recommendations to the government.
Ms Santi: The policy was first initiated in 1996. It has been some six years since that policy has been reviewed. It is timely for us to have a look at it and ensure that it is the appropriate tool.
Senator Stratton: If you say that the Auditor General is satisfied with the policy issue, I accept that. As you have said, the problem is not on the policy side, it is on the carrying out of the whole affair. Rules were broken. They were allowed to be broken and people got away with it. That is the concern we must have. Ultimately, that is the concern that we must have in order to put the brakes on to prevent that kind of thing from happening again. I am sure you will address that issue.
Ms Robillard: Let me tell you that we were very concerned when we saw the report of the Auditor General. It was serious enough that she decided, and rightly so, to refer the case to the RCMP. One of the main reasons for that was there was no documentation in the files. Something is wrong here. We will follow very closely what will happen.
More than that, I have asked Treasury Board Secretariat to write to all deputy ministers to ensure that they have implemented the policy in their own departments and that the employees who have the authority for that policy in their department are well trained. I hope that we will be able to reinforce the implementation of the policy in the departments.
Senator Stratton: Thank you very much, minister. You have been patient with me. I hope the next time you are back before us you will not mind me asking a follow-up question with respect to this to see what the results are.
Senator Bolduc: As the Comptroller General, I suspect that you also look at the pre-audit, which is the system of audit within the government. Public Works also has internal audits. What is the relationship between their services and yours?
Ms Robillard: Treasury Board has an internal audit policy. It is an obligation for all departments to have an internal audit function. They need to have a committee to follow up on the internal audit. When an internal audit is done in a department, a copy is sent to the Treasury Board Secretariat. We have a Centre of Excellence to follow up.
Senator Bolduc: They must also have a pre-audit. That is why I do not understand when you say that there is nothing in the file. If there was a pre-audit, I suspect someone would have seen that there was nothing in the file when they paid the money.
Mr. Neville: Every internal audit committee in a department would have what they call an audit plan, which is the universe of that particular department sketched out over a three- to five-year period. Over that period, they should be looking at all the major components within that particular department.
It does not mean that at any point in time every single transaction is looked at. It is a question of risk management coming into play and determining for that particular year what the audit plan consists of. Again, it does not mean it will pick up everything. It is just a question of how it is actually implemented.
I will say that Public Works and Government Services Canada has, in terms of reputation, one of the best internal audit committees in government. That does not mean that every error will be picked up. We are talking about a specific program in this case.
[Translation]
Senator De Bané: Madam Minister, to the extent that you have a say as the President of Treasury Board, what are the main challenges you see for the public service of Canada? How successful is the Canadian government at attracting the best candidates, the brightest people, to work in the public service of Canada? Are we offering them a career plan that encourages them to stay in the Canadian government?
I am a lawyer, so I will take an example from that profession. The Department of Justice of the federal government is the largest law firm in the country. How successful are you at attracting the best legal minds in the country? After a few years in the department, do these people leave to work for private firms because there are more opportunities for advancement? This is an issue for each department of government. If this comes under your authority, I would very much like to know what your department's priorities are. How will you ensure that we can both attract the best candidates and also offer them an exciting, stimulating work environment, that fosters the full development of their potential?
Ms Robillard: You have raised a very important issue. Although a government may have an action plan or program to implement, if it does not have the right people to do so, the government will not be able to deliver the high-quality services to which our citizens are entitled.
For a number of years now, the Treasury Board Secretariat has been devoting a great deal of effort to modernizing the financial management of the government. It is time to put as much effort into modernizing the management of our human resources. That is why the Prime Minister announced last year the creation of a task force on the modernization of human resources management. You have set out very well the challenges we face: namely, how to recruit, attract and keep highly-qualified people to provide these services for Canadians.
Various pieces of legislation on human resources have not been reviewed thoroughly for 30 years. Our society is changing quickly. At the moment, some job descriptions are archaic, and the fact that we do not have a good job classification system has an impact on our employees' working conditions. We do not have an effective staffing system. At the moment, it takes six months on average to higher a permanent employee for a position in the public service. So what happens? Managers facing urgent situations hire people temporarily or on contract. That does not build a stable public service. We must completely modernize the way we manage our human resources and modernize our legislation. We are working on that very actively. As early as this fall, I hope to be able to table in Parliament legislation to achieve these objectives.
Now as you said, recruiting and attracting people is one thing, but keeping them once they have been hired is another thing. Therefore our employees must feel that they are in a model working environment, that they can develop professionally and feel that they are making a difference by working in the public sector.
We have a great deal of catching up to do in this field. Only recently, a few weeks ago, I announced a continuous learning program for the civil service. We must modernize our methods in every field of human resource management. I feel that this task will be as difficult and as long as the one we undertook a few years ago in the field of financial management.
It is high time for our managers to realize that their prime responsibility really consists in managing human resources. We are currently working with this notion in mind.
Senator De Bané: Thank you for having given me such a frank answer about the challenges faced by our department. I am very glad to see your willingness to do the utmost to face these challenges successfully. Our committee members are very interested in human resource issues, because they are fundamental. Senator Bolduc was President of the Quebec Public Service Commission when it was modernized.
As I was looking at next year's budget, it seemed to me that for the year 2001-2002, you have forecast a $1.9 billion increase in public servants' wages. Is this the right figure and if so, by what percentage does it exceed the envelope of the fiscal year that just ended? Could you give us some more details about this $1.9 billion, if I have read this correctly, of course?
Ms Robillard: Yes, it is indeed a $1.9 billion increase. The departments expect to spend $21.3 billion on salaries. Thus there is an increase of $1.9 billion. This is an increase of 9.6 per cent over the previous budget.
This increase is largely due to the salary increases resulting from the last round of collective negotiations, as well as to higher costs borne by the employer for our health care or insurance plans, and, to a certain extent, to an increase in the number of employees in the public service.
So, we have the raises granted to public servants during the last collective negotiations that amount to $439.1 million and the wages and benefits for military and civil defence personnel have to be readjusted at the cost of $110.6 million. I could give you more details if you have any questions about the employer's contribution to the employees' benefit plan, but this is what went into the increases in the salary envelope.
[English]
Senator Cools: Recently, as you know, there has been a lot of debate within this committee on the question of foundations and the government's use of foundations. I have expressed the opinion on many occasions that the creation of foundations is a policy matter that belongs to the Government of Canada. The Auditor General believes that the arm's length approach to foundations makes them less accountable to Canadians. This is her opinion.
Could you tell me, minister — in other words, I think it is time to hear your views — do you believe that the Auditor General should have the authority to audit foundations?
Ms Robillard: Let me start by saying that it is clear to me that when the government decides to create a foundation to deliver services to Canadians it is a policy decision. We have decided not to deliver those services through civil servants but through an arm's length organization from the government. When we do so, we analyze the advantages and we take the decision.
Once the foundation is created, it is arm's length. On that we must be clear. That means you have a board of directors. The board of directors, assuming their responsibility as directors of the foundation, must decide who will audit their foundation. That is the responsibility of the board of directors.
Having said that, there is also a funding agreement with the government. In some funding agreements, the government may decide to provide, in the wording of the funding agreement, that the minister responsible for the foundation can ask for compliance audit provisions. In that matter, the minister responsible could ask the Auditor General to undertake the compliance audit.
Do you see the differences, as I do, in that regard?
Senator Cools: I do.
Ms Robillard: This is the way we have created some foundations. I would say that the governance structure of all the foundations that we have created is different, one from the other. However, when we look at the funding agreement, we try to reinforce all of the accountability regimes that we could have in the foundation through the funding agreement. There are many examples that we could provide if you wish us to elaborate. I am sure Mr. Neville could add to what I have said.
Mr. Neville: One point I should like to make is that there are a number of components in the agreements. We are trying to have some consistency among them since there has been divergence over time on the agreements and how they have been structured. We would certainly like to ensure that departments be required to report on the plans and the results of these foundations in their reports on plans and priorities and, again, in their departmental performance reports.
We want to ensure that there is accountability. However, we do not wish to lose sight of the fact that foundations are third parties. We must respect that thirty-party arrangement.
The Chairman: The policy problem, with great respect, is the broad policy problem that I would define as follows: That you have arm's length foundations, such as you have described, Minister Robillard and Mr. Neville, carrying out public policy goals. I do not know whether they are accountable to government, but they are not really accountable to Parliament in any way.
You talk about the board of directors. On some of those foundations, the government has a minority of directors. Is that not true?
Mr. Neville: That is correct.
Ms Robillard: That is correct.
The Chairman: A minority of them. You spoke about funding arrangements. Mr. Neville went through this some time ago when he was here. What has been happening is your colleague, the Minister of Finance, spills money into these foundations that have been created toward the end of the fiscal year — many of them fall within the Canada Corporations Act — and then you set about negotiating what you call the funding agreement.
Finally, a point that was raised by Senator Lynch-Staunton several times — I had not adverted to it myself, but I sat up straight when I heard it. In some of these cases, if the money is liquidated, the money does not go to the government, it goes off, at the behest of the directors, to some other good cause or something of the kind. That is really a gross departure from what we have been accustomed to in a parliamentary democracy.
Mr. Neville: Mr. Chairman, if I could, a couple of points of clarification. First, the three largest foundations have been approved by Parliament. Eighty per cent of the foundations have been approved by Parliament. Accountability is there.
In terms of the last point, we have changed — as we said we would — a number of the agreements over the last several months to have wind-up provisions that would allow the funds to be returned to the Consolidated Revenue Fund.
Having said that, each time you make that kind of a decision, where you are increasing the accountability, you are, of course, shortening the arrangement of a third-party entity. You are bringing it closer to the government.
The Chairman: What is wrong with that?
Mr. Neville: At some point in time, it will no longer be an outside instrument; it will be part of government.
The Chairman: On the general policy issue, and I am not asking you to debate it, Mr. Neville, though ministers should and politicians should determine whether it is appropriate to go outside, to arm's length foundations, to pursue these objectives of public policy which, in other times, were pursued by politically accountable and responsible ministers and their departments. That is the question.
Ms Robillard: You can argue that, and you can disagree with the government, senator. However, I must tell you that the government agreed. Take the Canada Foundation for Innovation: If, tomorrow, we had to make the same decision, we would do it as a policy decision.
The Chairman: So what?
Ms Robillard: A policy decision is a decision of the government. Through the foundation and the results that we have right now, we consider the policy decision the right tool to do it.
The Chairman: You understand why parliamentarians would be preoccupied with this growing practice.
Ms Robillard: For this item, I do not agree. For this item, if I remember well, an annual report is tabled in Parliament. I believe the president of the foundation was called, I do not know how many times, in front of parliamentary committees to explain what is going on.
Mr. Neville: Eleven times in the last four years.
Ms Robillard: Do not tell me there is no accountability to Parliament when I can see there is.
Let us talk about Genome Canada or other foundations. We can give you some very good examples where the governance structure is very clear. Parliamentarians can know what is going on in the foundations through established mechanisms.
We have others that are more or less structured in that way. That is why we have made a commitment, through the renewal of the funding agreement, to reinforce the accountability side of it. That is what we have done.
Senator Bolduc: Are you ready, minister, to amend the Financial Administration Act to add general regulations concerning those kinds of administrative agencies? Traditionally, we had departments. Following that, we had regulatory commissions and then government corporations. We decided that among the government corporations we would have Parliament corporations, Crown companies and another one that I do not remember the name of.
We made a general legislative framework for what I would call the financial accountability of the government through various mechanisms. Accountability is not the same for a department, a departmental corporation, Crown companies or administrative regulation institutions.
Now, a decision has been made to have other types of service delivery mechanisms. I do not object to that, personally. However, there must be consistency with, one the one hand, the principle of efficiency — you argue that foundations would be more efficient, and I tend to agree with that — and on the other political responsibility.
Given the many examples of types of funding agreements, can general rules be incorporated into the Financial Administration Act, to see what types of accountability exist with the government, the ministers and Parliament?
The Chairman: What about the 50,000 employees who went to the new revenue agency and Parks Canada?
Ms Robillard: That is a different issue.
The Chairman: It is a related issue. They are more accountable. However, because someone did not like the constraints of the Financial Administration Act, out they went.
Senator Bolduc: If it is good for them to be out of the civil service, why is it not good for the employees for the Department of Justice?
Mr. Neville: We have taken steps to improve accountability. We have a new policy, which I believe I may have mentioned before, on alternate service delivery. That policy deals with the variety of organizations that will deliver government services. That is why we call it ``alternate service delivery.''
We also have a new policy on grants and contributions, a policy that is focused on ensuring that the proper procedures are being followed. Those are within the overall framework of the Financial Administration Act. We feel that is sufficient.
The Office of the Auditor General has not said that the procedures that we have been following, specifically with respect to alternate service delivery policy or the grants and contributions policy, are not appropriate. If anything, I believe that on both counts the Office of the Auditor General has said that those two policies are the right way to go.
Senator Bolduc: The Auditor General also said that they cannot do a proper job vis-à-vis the foundation. Beyond that, we have a situation where in some cases you give a montant forfaitaire instead of a contribution so that the money does not go anywhere for two or three years. What is happening during that time? Who is managing that money?
Mr. Neville: The funding is structured for the money to go out in one payment for two specific reasons. The first is to allow the foundation to leverage that money with the private sector and, therefore, be in a position to increase the amount of money. The second reason is to take away — and this is the decision of the government — the possibility of a political decision on a previous commitment having been made and not being in a position to actually carry out the previous commitment.
Senator Bolduc: When you do that, you are constraining the hands of the next government. That is not what I would call the annual, ordinary accountability system for a parliamentary democracy.
Senator Cools: Mr. Chairman, I also think that on our list of issues to be studied we should add the Financial Administration Act and its relevance and needs in today's contemporary society. We have a long list. Whether the government should use these foundations is something we could debate.
However, my questions had to do with the Auditor General's objections. It is a policy question. Our disagreements right now are still policy. They are not audit disagreements.
Senator Bolduc: We know perfectly well, also, that the job done by the private auditors in those foundations is not nearly the same type of job the Auditor General does in the government. It relates only to legislative types of things. It is not something that goes beyond the conformity.
There has been reform in the last 25 years so that the Auditor General can do a thorough job. This is not done for the private foundation now.
Mr. Neville: Mr. Chairman, the funding agreements do allow, most of them at this point and probably all of them in due course — if I could, Mr. Chairman —
Senator Bolduc: It is one by one, all the time.
Mr. Neville: The funding agreements do allow for the minister concerned to ask the Auditor General to do additional work in terms of value for money or any type of audit over and above the compliance audit. Having said that, there are some changes that would be required. However, it is not impossible for that to occur.
[Translation]
Senator Ferretti Barth: My question is completely different from those that have been put up to now. I knew you when you were a minister in Quebec and I think that you are well aware of the work accomplished by the Italian community in setting up a network of volunteers.
Your report states that from 1997 to 2000, the number of volunteers went from 31.4 per cent to 26.7 per cent. Volunteers are an important part of our community. They do more than a billion hours of unpaid work.
You signed a historical agreement with regard to community volunteer work and I would like to know whether you intend, through future programs, to encourage people to become volunteers. You know that the situation is very difficult because volunteers are becoming very scarce in our community centres. You also know that they are the ones who do the most tedious chores in our society.
It is very important to establish volunteer training programs and to provide some small benefits for them in recognition of their dedication. Volunteers work in all areas of activity. Personally, I spent 30 years bringing together 800 volunteers, who now work in the Italian community in Montreal and its suburbs. I worked on this very hard, and others who believed in what I was doing did so as well.
Unfortunately, today, government grants are becoming rare or non-existent. Our population is aging and there is a lack of proper services, because we do not have properly trained volunteers. For these reasons, Treasury Board should encourage programs for volunteers.
Ms Robillard: I am very open to this. I will respond to this question not as President of Treasury Board, but as the minister responsible for the initiative with the voluntary sector with the government.
For some years now, we have had an initiative in cooperation with the voluntary sector, and the Prime Minister appointed six ministers to assume responsibility for this initiative. We worked with leaders from the voluntary sector to reach a formal agreement on our relationship. Initially, the important thing was to recognize the voluntary and community sector as a pillar of our society, just as the public or private sectors.
Some 6.5 million Canadians do volunteer work, in all sectors of society. Without volunteers, we would have serious social problems in our communities.
The Government of Canada has made a commitment to work with the voluntary sector to try to strengthen it. We adopted an unusual approach for this, and we are working jointly with the public service. We decided together which points we should be working on and we established some joint groups. In a group of 10, there are 5 leaders from the voluntary sector and 5 senior officials. We have undertaken certain initiatives. We have had the International Year of the Volunteers. We also have a group that deals specifically with all the regulations that affect the voluntary sector and seeks to lighten the burden imposed by these regulations.
The focus of another group was to better promote voluntary work in our society. The Statistics Canada survey is part of our initiative with the volunteer sector. In short, we have done a great deal to try to strengthen the voluntary sector.
Last December, the Prime Minister of Canada signed a formal agreement with the voluntary sector that set out our future relationship. I think that this is a new relationship and that it will develop over the years. The government of Canada will be there as a partner with the volunteer sector, not only to provide funding in order to offer services to Canadians, but also as an important stakeholder when policy decisions are being made, so that the Canadian government consults people in the voluntary sector, as it does in the case of the private sector.
If you wish, I could send you some documentation about what we are doing at the moment and what we expect to do over the next few years. It was time that the government of Canada recognize officially the voluntary and community sector as one of the pillars of our society.
[English]
Senator Stratton: I should like to return to the subject of foundations. You said, minister, that you had done an analysis of the pros and cons of foundations; is that analysis available?
Ms Robillard: I said that every time we decide to create a foundation the government must decide if that is the best way to deliver the services. It is not a general analysis. Every time the government announces a foundation — Genome Canada, for example — we will review the situation.
We now have a new alternate service delivery policy. That means that when a department decides to use a foundation to deliver services or other entities it must respect that policy. That policy requires the foundation to pass what are called public interest tests.
It would be interesting to see the range of plans in the different departments to delivery services in a variety of ways. We hope to encourage innovation. At the same time, we want to respect the public interest, as well.
Senator Stratton: Perhaps I misunderstood. My ears heard that you had done an analysis of the pros and cons of foundations and had made a decision as to how they were structured. If that information were available we would be delighted to get it.
I should like to return to the subject of EI. In the Auditor General's report of 2001, Chapter 13, at 13.17, it reads:
The Commission did not provide adequate justification for the size and state of growth of the Account balance.
In the Auditor General's 1999 and 2000 reports to Parliament, we asked the Commission to clarify and disclose the way it interprets the Act in setting premiums. We found that the Commission had not defined and disclosed to the public and Parliament its interpretation of some key legislative terms related to setting premium rates, such as ``business cycle,'' ``enough revenue,'' and ``relatively stable rate levels.''
At 13.19, the report continues:
We expected the Commission to clarify and disclose the reasons for collecting $21 billion more than the maximum reserve suggested by the Department's Chief Actuary.
The last sentence of clause 13.19 reads as follows:
Therefore, we were unable to conclude that the intent of the Employment Insurance Act had been observed in setting the 2001 premium rates.
I believe you told me, Mr. Neville, that those questions had been answered by you and that the Auditor General is now satisfied.
Mr. Neville: I believe I said that the Minister of Finance and his officials had dealt with the questions specifically and had responded. I am not aware of where it is at this point. That question would be best asked of the Minister of Finance and his officials.
Senator Stratton: Hence, as far as we are concerned, we are on the same track. There is a huge surplus, and it has not been justified. The answers you have given me are unsatisfactory with respect to that. I must assume that the Auditor General's report of 2001 stands.
Mr. Neville: Mr. Chairman, that is really a question that should be addressed to the Minister of Finance and his officials.
Senator Stratton: I appreciate that.
Senator Banks: Ordinarily, when an advertising agency is buying time or space, it is dealing with people who have two rates. The first rate is called national and the other is called local. The difference is that a national rate contemplates that a buying agency will deduct from the payment its commission. That is how they make money.
Could you tell us whether, in the case of agencies that have been engaged to buy advertising time or space, in addition to the fee that they might have been paid they are in the habit of or would normally deduct the normal advertising agency commission?
Could you also tell us what the $3.5 million DND grant to the Municipality of Shannon was for?
If you wish, you can respond to those two questions later by letter to the clerk.
The Chairman: Do you wish to do that in writing, Mr. Neville?
Mr. Neville: On the first question, I will ask Jane Cochran to respond.
Ms Jane Cochran, Executive Director, Procurement and Project Management Policy, Procurement and Project Management Policy Directorate, Comptrollership Branch, Treasury Board of Canada: Honourable senators, we can provide you with a general overview of the way the structure works for advertising contracts generally.
I must also note that in specific contexts where contracts may have been tendered individually there may be specific provisions such as the one you described.
Generally, a commission rate of about 12 per cent is paid for the services side of advertising — the placement, the development and that sort of thing. Production costs are paid over and above that rate.
Senator Banks: The government pays the commission rate in addition to the book rate of the time or space bought; is that correct?
Ms Cochran: That is right.
Senator Banks: Is there, in addition to that, a deduction made by the agency when they pay the bill? In other words, is double-dipping going on? There is nothing particularly wrong with that; I am just wondering whether it happens.
Ms Cochran: To our knowledge, that does not happen. However, we would have to discuss that specifically with Public Works and Communication Canada. As well, we would have to look at that from a global perspective as well as a transaction-by-transaction basis. Transactions are not structured in the same way in every instance.
Mr. Neville: On the second question, we will get back to Senator Banks.
The Chairman: The hour is late and we are not meeting in the most salubrious of circumstances. The minister knows, I think, because I sent word to her, that I was going to ask her questions about public service reform. Instead of asking the questions, however, I will make a speech.
I will tell you what my concern is, Madam Minister. I hear what you told Senator De Bané about your intention to bring in legislation in the fall. That concerns me. One should not underestimate the anxiety that there is around town over the project of public service reform. I am aware that the Prime Minister appointed a working group and that, perhaps, there are other advisory committees and so on in operation.
There is a great deal of speculation and comment around town among people who would be affected — obviously, people in the public service and parliamentarians — as to what is going on and what is the direction of your project, where it will lead. Much of the discussion and speculation is probably not well informed because none of us really knows what is going on. We do not know what options are being looked at by your committees and what conclusions you may have come to.
I appreciate, by the way, parenthetically, that you are personally committed and involved in this exercise, which is why I am taking the time to express some concerns. I would have thought that the public interest would be better served under the circumstances were the government to bring in a white paper in the fall rather than a bill. With a white paper, we could have a broad discussion, perhaps a discussion that would be rather more free than is the case when you bring in a bill and put it on the table of the House of Commons for first reading.
To some extent, a lot of people regard an important government bill as cast in stone. We will not, perhaps, have as effective debate and consultation as we should have. That is a general point.
More specifically, I am concerned that in whatever you decide to do to modernize the system what we need to do is recover and restore certain basic concepts that I think have been eroded over a period of many years. One such matter that is intimately related to the protection of the merit principle is the relationship between the Public Service Commission and Parliament. Of course, you will be aware that, legally, the Public Service Commission has pretty much the same relationship to Parliament as the Auditor General does. Over a period of years, the Public Service Commission has become almost another central agency of government. It is doing things for the government. It has drifted. Parliament and the Public Service Commission have drifted farther and farther apart.
On the matter of its becoming almost a central agency of the government, you will be aware that in order to protect the autonomy of the commission and its members they are appointed for 10-year terms. I sent for a list going back to 1917. I am reading Sir Robert Borden's memoirs to help me with this. To find the last chairman or president of the Public Service Commission who served his full term you have to go back to 1976. The last three chairmen served four or five years and then were out.
As for commissioners, you have to go back to 1957 to find a commissioner who served the full term. There is a revolving door over there. There has been a revolving door at that place for quite a long time. Some of them, I think, after a few years in the commission, are simply being transferred to other posts in the public service.
I say with great respect that that is not the way the thing is supposed to work. I think that is a serious departure from the concept. I should like to see us get back to that. I should like to see the Public Service Commission back in a tight relationship with Parliament. I think Parliament should have a say as to who the chairman at least and perhaps the commissioners are. I think they should be done by resolution in the same way we do the Commissioner of Official Languages and people like that. The commission must be seen primarily — indeed, almost exclusively — as Parliament's agent in ensuring that the merit principle is respected.
In terms of the commission delegating some of its authority to deputy heads and so on to get it done, I have no objection to that, provided that the commission retains its right to rescind that delegation at any time.
I do not know how much you are prepared to tell us now about the legislation you are bringing in this fall. Rather than ask you a whole series of questions, I thought I would let you know how I, some other members of this committee and other parliamentarians feel about what is taking place.
Ms Robillard: It is late. However, I will make a few remarks because this is such important legislation.
First, I understand that when there is a white paper there can be long discussions and consultation. I have seen all the reports there have been on public service reform. I go all the way back to the Glassco report. Everyone agrees on the problems. There have been many recommendations over the years, along with report, after report, after report. I have said that enough is enough. Everyone has analyzed the system. I will even include the report of the Auditor General of last year. She had two very good chapters on human resources.
Where are the problems in the system? We have decided that, instead of another white paper or another report, this time we will have more of an action plan. Let us act on that. The task force is very unusual. However, its mandate is to produce a memorandum to cabinet and not to produce a report.
There was a very open and transparent process followed by the task force. I do not know if you have had a chance to surf the Web site of the task force. If you have, you would have been able to see the orientation that we wish to follow as a result of the questions we asked across the board, questions that we asked of our employees, our managers and of experts. We also have an external advisory committee on which academics and private sector people sit. They, too, are looking at this.
The first consideration will be with the legislation itself. Do we want to have prescriptive legislation as we have right now? Or do we want to have more value-based legislation as opposed to rule-based legislation? There has been a lot of discussion around that. We are working on it. This is one part of the legislation.
The other part is about the recourse mechanism in the system. Right now, there are 12 recourse mechanisms in the system that an employee can use. We are addressing that issue. We are also addressing the issue of labour relations. We developed the Fryer report, which dealt specifically with labour relations. That can also be found on the Web site with their recommendations to the government. We are working on all of these issues.
Let me conclude with some comments about the Public Service Commission. I am not able to compare the Public Service Commission, PSC, to the Auditor General. The PSC upon close scrutiny is found to have two sides. On the one hand, it reports to Parliament; on the other hand, it has executive responsibility with recruitment, staffing and training. That is why the PSC has two sides to it. Parliamentarians are not satisfied with trying to reinforce an institution as an institution that protects the merit in the system. They may audit some of that merit and report to Parliament on it. At the same time, they are able to give greater responsibility to managers to increase their efficiency to better meet their needs. We are examining that now and I am pleased to find that there is some interest.
Parliamentarians are interested in this matter. Some of them understand what is happening in the public service because they have had many years of experience in the public service. When it suits you, I will come back to further discuss these issues, perhaps when the bill is tabled or afterward. I will be interested in hearing your views.
Senator Bolduc: I understand that you have consulted with many people except, perhaps, the parliamentarians. You ask them to attend for the legislation only. It will be difficult for us to suggest amendments. I know the story of the comparable institutions in England, France and the United States. I am quite familiar with all of that. Be very careful if you intend to give the recruitment and selection of people to the managers of the department.
The Chairman: I agree with the senator.
Senator Bolduc: You have to be careful; you know the story of patronage. It may come back, you never know. There needs to be a balance, but we will talk about that.
Senator Cools: Ms Robillard, thank you for being generous once again with your time and spirit in appearing before the committee. I am deeply encouraged, Minister Robillard, to know that the Commons is reverting to the old system of having an Estimates Committee.
The committee adjourned.