THE STANDING COMMITTEE ON INTERNAL ECONOMY, BUDGETS AND ADMINISTRATION
EVIDENCE
OTTAWA, Thursday, November 25, 2021
The Standing Committee on Internal Economy, Budgets and Administration met with videoconference this day at 11:30 a.m. [ET] pursuant to rule 12-7(1) for the consideration of financial and administrative matters; and, in camera, pursuant to rule 12-7(1), for the consideration of financial and administrative matters.
Senator Sabi Marwah (Chair) in the chair.
[English]
The Chair: Good morning, everyone. My name is Sabi Marwah, I’m a senator from Ontario and I have the privilege to chair the Standing Committee on Internal Economy, Budgets and Administration. Today we will be conducting an in-person meeting with senators participating in person and witnesses appearing virtually. The meeting will start in public and a portion of the meeting will be in camera.
Welcome, colleagues. This is the first in-person meeting we’ve had in almost two years, so it’s really good to see everybody at the meeting. I’d like to introduce the senators who are participating in the meeting: Senator Patricia Bovey, Manitoba; Senator Larry Campbell, British Columbia; Senator Claude Carignan, Quebec; Senator Dennis Dawson, Quebec; Senator Tony Dean, Ontario; Senator Pat Duncan, Yukon; Senator Raymonde Gagné, Manitoba; Senator Mobina Jaffer, British Columbia; Senator Paul Massicotte, Quebec; Senator Lucie Moncion, Ontario; Senator Victor Oh, Ontario; Senator Don Plett, Manitoba; Senator Raymonde Saint-Germain, Quebec. Welcome to all of you. We have Senator Ratna Omidvar from Ontario as a guest. Welcome to all of you across the country that are viewing this virtually.
Colleagues, before we begin, I would like to take a moment to publicly pay tribute to our dear colleague and fellow senator, the Honourable Josée Forest-Niesing, who passed away much too soon this past weekend. As many have stated over the past few days, she was a proud Franco-Ontarian, an accomplished lawyer and a strong defender of our official languages. Josée was a fantastic colleague. Among many other roles, she participated actively on this committee and was a dedicated member of the Subcommittee on Long Term Vision and Plan.
On behalf of everyone, I wish to extend our sincere condolences to Senator Forest-Niesing’s family at this difficult time. She will be missed.
Honourable senators, the first item is the approval of the public minutes from June 10, 2021, which is in your package. Are there any questions or changes? I see none. Can I have a mover for the following motion that the minutes of the proceedings of Thursday, June 10, 2021, be adopted? Senator Dean moves the motion. Is it your pleasure, honourable senators, to adopt the motion? Agreed, carried.
Colleagues, the next item concerns the annual financial statements of the Senate of Canada and our audit results. Joining us virtually is Pierre Lanctôt, Chief Financial Officer; Nathalie Charpentier, Comptroller and Deputy Chief Financial Officer; as well as Suzie Gignac, Engagement Quality Partner and Celina Salamani, Senior Accountant, Assurance Services from Ernst & Young.
Welcome, everyone. The presentation will be followed by time for questions. It is my understanding that Senator Moncion will speak first, followed by a presentation from Pierre Lanctôt and the representatives from Ernst & Young.
[Translation]
Hon. Lucie Moncion: The Subcommittee on the Senate Estimates of the Standing Committee on Internal Economy, Budgets and Administration has the honour to present its ninth report.
[English]
Your subcommittee has approved the audited financial statements of the Senate of Canada for the year ended March 31, 2021. The audit was conducted in accordance with generally accepted Canadian auditing standards by the professional services firm of Ernst & Young LLP.
[Translation]
The audit resulted in an unqualified auditor’s report indicating that the financial statements present fairly, in all material respects, the financial position of the Senate as at March 31, 2021 and the results of its operations, the change in net financial position, the change in net debt and its cash flows for the year then ended, in accordance with Canadian public sector accounting standards.
[English]
Your subcommittee recommends that these financial statements be approved and tabled in the Senate, and it is respectfully submitted by myself.
I will now move on to the explanations that accompany the financial results.
[Translation]
I will take a few minutes to discuss the highlights of the Senate’s results for fiscal year 2020-21 as well as the financial status as of March 31, 2021.
I will start with some new or unusual information included in the financial statements.
First, an adjustment expense of $19.8 million was recorded to account for an actuarial deficit related to the senators’ pension plan. This deficit has been recorded as a pension adjustment expense in the statement of operations. Note 8(b) provides details of the actuarial position and adjustment.
Second, a special payments expense of $600,000 was recorded to account for compensation paid to employees of a former senator, as approved by CIBA in October 2020. Note 9 provides details on these payments.
[English]
Finally, the translation and interpretation services received without charge from the Translation Bureau during the year are now reported in the statement of operations and total $2.5 million in financial year 2020-21. These services were not previously recognized in the Senate’s financial statements in prior reporting periods because the information was not available.
I will now move on to the expenses. Overall, the Senate’s total expenses subject to budgetary spending authorities reached $114.7 million for financial year 2020-21. These results indicate an increase of $17.4 million compared to the previous fiscal year, which represents a 17.9% increase, mainly due to the following non-recurring items: the senators’ pension plan adjustment of $19.8 million; the retroactive economic salary increase of $5.5 million that was approved by CIBA in March 2021 covering the last four fiscal years; the special payment expense of $600,000. When adjusted for the non‑recurring items, total regular expenses total $88.8 million, which represents a decrease of 8.7% compared to the previous year due to a lower level of activities because of the pandemic.
[Translation]
I will now clarify some of the highlights of the Statement of Financial Position, which is on page 1.
Accounts payable and accrued liabilities — Note 4(b) — of $10.8 million increased by $2.9 million compared to the prior year, primarily due to the retroactive economic wage increase approved by CIBA in March 2021.
Tangible capital assets — Note 5 — of $6.8 million increased by $1.2 million compared to the prior year, primarily due to the acquisition and transfer of fixed assets totalling $3.2 million.
This concludes my presentation. I would like to mention all the work done by the staff and the quality of your interventions. The committee is very happy to work with the employees of the administration. We thank you and we also pass on our thanks to the firm of Ernst & Young for their excellent work.
[English]
Pierre Lanctôt, Chief Financial Officer, Finance and Procurement Directorate, Senate of Canada: Senator Moncion provided a very good summary of the financial statements for 2020-21, so I will move to the questions.
The Chair: Are there any questions for Pierre?
[Translation]
Senator Massicotte: Mr. Lanctôt, thank you for being here this morning. In your report, there are the financial statements. Then there are several items where you make recommendations, which are called your “audit report.”
Is there anything you noted in your report or in your oversight that is wrong or of concern? I know your report referenced several instances, but is there anything in particular you want to share with us?
Mr. Lanctôt: Senator, is your question for the auditors?
Senator Massicotte: Yes, that’s right.
[English]
Suzie Gignac, Engagement Quality Review Partner, Ernst & Young LLP: Thank you very much, senator. We don’t have anything in particular to bring to your attention. We can walk through our audit results if you like. There’s nothing that jumps out at us or that we have any concerns. From our perspective, we believe that the judgments made and the accounting, as presented, is appropriate.
Senator Massicotte: When you provide your services to the Senate, per se, you obviously give your advice and you’re getting somewhat involved in operations. Does that potentially cause you to be in conflict, whereby next year you’ll basically audit your own recommendations and results?
Ms. Gignac: No, we actually do go through extensive procedures to ensure we are independent as auditors. We will present and provide feedback if we note anything as we do our walk-through procedures and processes. But we’re very careful to make sure we’re not auditing our own work and that we don’t do any work that would bring us into conflict from an independence perspective.
Senator Massicotte: Thank you.
[Translation]
Senator Saint-Germain: I just have some additional information. As per best practices, we, the members of the subcommittee, under the chairmanship of Senator Moncion, met in camera with the auditors without any staff. We asked them if they had any questions, comments or issues to raise. Their response was very clear. They had had the opportunity to review all the documents, ask all their questions, and they had no concerns or issues to raise that were not already in the report.
I think that’s reassuring for all of our colleagues.
[English]
The Chair: That leads me into my next question. If there are no other questions, it’s always a good practice for senators to meet privately with the auditor following an internal audit.
At this time, we should briefly go in camera. I would ask all officials and staff to please leave the meeting except for senators, the recording secretary and the auditors from Ernst & Young.
(The committee continued in camera.)
(The committee resumed in public.)
The Chair: Colleagues, item 3 is next on our agenda. It is the eleventh report from the Subcommittee on Senate Estimates regarding the Main Estimates for 2022-23. Again, Senator Moncion, the chair of the Subcommittee on Senate Estimates, will offer opening remarks. Our CFO Pierre Lanctôt and Nathalie Charpentier, our deputy CFO, will assist with this item.
Senator Moncion: The Subcommittee on the Senate Estimates of the Standing Committee on Internal Economy, Budgets and Administration has the honour to present its eleventh report, intercessional authority.
On November 20, 2020, your subcommittee was mandated by the Standing Committee on Internal Economy, Budgets and Administration to examine and report on financial matters, including any proposed estimates, keeping in mind the necessity for the Senate and its administration to demonstrate responsible management of the public funds that are allocated to the institution. Your subcommittee met virtually over the last few months to plan the Senate’s financial strategy for the financial year 2022-23 Senate Main Estimates. The subcommittee then held meetings in November 2021 to consider the institution’s financial needs.
At these meetings, your subcommittee, comprised of Senators Bovey, Marshall, Moncion, Saint-Germain and Tannas, heard testimony from a total of 11 individuals, including each member of the executive committee. Your subcommittee submitted questions to clarify various elements of the budget, to which satisfactory responses were provided before and during the meeting. The document presented to the subcommittee outlined the financial requirement for senators, committees, International and Interparliamentary Affairs, the Senate Administration and the Senate as a whole. Any request for additional funds required justification to the subcommittee, supported by detailed documentation. Your subcommittee thanks these individuals for their presentation as well as the lead of each directorate for preparing the material presented to the subcommittee.
Throughout its examination, your subcommittee indicated its intention to approve a budget that takes into account the Canadian economic reality after more than 20 months of the pandemic. The measures taken by the Senate to protect the health and safety of senators, staff, partners on the Hill and the public have had a significant impact on the operational activities of the Senate. Your subcommittee underlines the importance of balancing the potential increase in operational needs in light of the new vaccination policy, the gradual lifting of health and safety restrictions, and good stewardship of public funds.
While the recovery from the pandemic will depend in part on the Canadian health situation and how the Senate chooses to conduct its operations, the 2022-23 financial planning is based on the assumption that the parliamentary calendar and Senate operations will be similar to those of a normal year and that the effects of the pandemic will be minimal.
The proposed budget is based on the following principles: ensure continued high quality of service to senators; invest in and replace assets that have reached the end of their useful life; focus on necessary activities only; and ensure good stewardship of public funds.
Throughout the course of its deliberations, your subcommittee noted key elements it believes should be highlighted to ensure the continuity in the development and consideration of future financial needs.
On information technology, your subcommittee emphasizes the importance of maintaining the infrastructure and security of systems that support the information technology needed for the proper functioning of the Senate’s day-to-day work. This argument is particularly valid since the Senate community has largely been working remotely since the beginning of the pandemic.
With human resources, your subcommittee stresses the importance for the Senate of the activities carried out by the Human Resources Directorate, as these activities impact all areas of the institution. Changes are particularly prevalent in the planning and delivery of institutional training programs, in the supervision of the reclassification of certain positions in the Senate and in support of the legislative framework for pay equity.
On legal context, your subcommittee acknowledges that the Senate has changed significantly in the past five years and notes developments in the work carried out within the Office of the Law Clerk and Parliamentary Counsel, particularly in the context of the various new legal and statutory provisions that apply to the Senate.
For capacity and resources, your subcommittee acknowledged the information submitted by the various sectors of the Administration with respect to the limited resources to support the parliamentary activities of the Senate. Given the current environment, your subcommittee recognizes the Administration’s effort to maintain new budgetary demand without compromising service to senators. Your subcommittee also notes that additional funding requests may be submitted in relation to increased activity levels, including support for the virtual or hybrid meeting platform.
[Translation]
Yet, your subcommittee notes that the number of positions within the administration has been increasing over the past five years, as presented in Appendix C.
While the institution’s core responsibilities have not changed in this period, your subcommittee heard during presentations that there have been fundamental shifts in the source of required support to maintain activities, such as various areas of research, security, procedural and legal advice. Your subcommittee does not dispute this shift but does wish to support a framework that maintains a balance that respects the need for additional resources to meet operational requirements, work-life balance and the sound management of public funds. Achieving this balance implies a collective effort by senators and the administration.
The total budget for the Senate considered by your subcommittee for FY 2022-23 is therefore $121,821,702 (see Appendix A). This represents a 5.4% increase over the previous fiscal year. The senators’ budget was increased by 1.9%, the committees’ and IIA’s by 51.5% and 10.4% respectively. New funding requests from the Senate Administration amount to $665,928, an increase of 1.6%, in addition to the creation of a new Indigenous Youth Internship pilot project established at $176,500, while changes approved by CIBA during the year, including non-recurring savings, amount to a total of $2,990,642. Also, the budget for the Employee Benefit Plan has been increased by $164,996.
It should be noted that only $1.3 million of the total increase is for new requests, while $800,000 is for statutory expenditures and $4.1 million is for expenditures already approved by CIBA. This includes one-time savings for FY 2021-22, of which $2.6 million is for economic salary increases from previous years. Excluding retroactive salary increases, the total budget increases by 3.1% or $3.6 million.
Specifically, with regards to the expenses for senators, a total increase of $1.1 million is projected, representing the economic increase in allowances and pensions for senators and the inflation rate of 2% for the office expense budget. There is no increase in the travel budget. The telecommunications budget is reduced by $32,000 due to the elimination of landlines. The living expenses budget increases by $100,800 to reflect cost increases over the past two years.
The Senate committees budget increases by $810,000 to reflect the original pre-pandemic funding level. An increase of $329,000 is intended for the International and Interparliamentary Affairs Directorate to cover the cost of the 47th annual session of the Assemblée parlementaire de la Francophonie. Additional Senate-wide expenditures of $165,000 reflect benefits for senators’ staff and administration employees and result from the 0.2% increase in the contribution rate and salary expenditures, while additional administration-wide expenditures of $321,877 will cover position reclassifications and an Indigenous Youth Internship pilot project.
In this regard, your subcommittee recognizes the importance of the initiative put forward by the Human Resources Directorate and based on a recommendation in the 30th report of the CIBA Subcommittee on Diversity for an Indigenous Youth Internship program, but also notes the precarious status of the project. A careful and well-orchestrated progression through a pilot project is recommended.
Lastly, the administration’s proposed new funding requests include 6.5 additional full-time equivalent (FTE) positions, which includes 3.3 FTEs for the Indigenous Youth Internship pilot project. In addition, it is proposed that 9 term positions related to the Long-Term Vision Plan (LTVP) Program of Work and funded by Public Services and Procurement Canada be made indeterminate.
And finally, all that said, here are the recommendations.
Following a comprehensive review of the proposed 2022‑23 Main Estimates, your subcommittee makes the following recommendations: that the Senate budget for FY 2022-23 be $121,821,702 (Appendix A) which represents a 5.4% increase over FY 2021-22; that the FY 2022-23 budget adjustments listed in Appendix B be approved; and that the proposed budget strategy be accepted.
Respectfully submitted.
[English]
The Chair: Thank you, Senator Moncion. We’ll open it up for questions.
Senator Plett: The way I read this and the way I’ve understood this, Senator Moncion — jump in and correct me if I’ve made an error before I get to my questions — is that the senators’ budgets have an increase of 2% based on inflation and that the house officers’ budgets are not increased at all. I’m wondering where you get 2% inflation when the last numbers we heard was that inflation is closer to 5% than 2%, yet we have a cost-of-living increase here of 2%.
The other question is about house officers. There is no increase, and I’m wondering where the consistency is for that. For example, as a house officer, I have some Senate staff who are my staff as a senator. I brought them with me and they are my Senate staff. If I would cease to be the leader of our caucus, they would be my staff as a senator.
Maybe I’m reading this wrong, but what I understand is that they would get a 2% increase when the rest of my staff working for me in my position as a leader wouldn’t get any. They have the same cost-of-living increases as everyone else.
Those are my two questions. I think you know what I’m asking. Where do you get 2% when inflation is at least 4.7% — and probably 5% — and it only applies to senators’ budgets and not house officers’ budgets?
Senator Moncion: Thank you for the question. First and foremost, the 2% increase is not associated with salaries. It is associated with the office budget. Staff will correct me if I’m saying something that is not right, but because of the way the increases are given to our staff, they are retroactive, so we are not keying in information or putting increases in the budget for salary; it’s just for the expenses of our offices.
For the house officers, there was no increase. It was deemed from your committee that we could work within the allocations that are provided at the moment without taking the increases into consideration. So it was a prudent approach that we were looking at when we were looking at the allocation.
Pierre or Nathalie, if you want to add information to what I’ve said, please do.
Mr. Lanctôt: With respect to inflation, the inflation that we’re talking about these days, the 4% or 5%, is based on recent month-over-month changes, which is like year-over-year but for the specific month. What we’re using as inflation is year-over-year for a longer period. When we prepared the document in the second quarter, inflation was not at the same level, so there is a bit of a delay between the inflation that we’re seeing in the recent weeks versus the inflation that we are incorporating into our forecasts.
Senator Plett: Thank you for that.
I don’t want to belabour this, but we are being asked to approve something today when the inflation rate is 5%. Maybe the inflation rate was 2% when this document was prepared; I don’t think so. We are being asked to approve something today at a 2% inflation rate.
I would prefer for us to simply say that we are increasing allowances and pensions for senators. When you say, Senator Moncion, that it’s not for salaries — I think I heard you say — it says “an increase in allowances and pensions for senators and the inflation rate of 2%.” The inflation rate is not 2%, and that’s what it says here. We should perhaps simply take the word “inflation” out of this document, then, if we don’t want to keep up with the inflation rate. We have a $121-million budget in the Senate budget here, which I would certainly not consider as being very prudent, with an increase from a few years ago when it was $85 million. Now it’s $121 million. That’s not very prudent.
In any event, I have again raised my concern. I think if we want to increase things by an inflation rate, we have to use a true rate. Also, I believe that, as a house officer, I have the same increases as I would as a senator.
Those are comments. Thank you, though, for your answers.
Senator Moncion: I will just add that the 2% that is associated is the regulated 2%, which is the one that is used for the senators. It’s a regulated inflation; it’s not associated with the inflation rate that is currently going up.
[Translation]
Senator Massicotte: Thank you, Senator Moncion, and your committee. This represents a lot of work and there’s a lot of detail. Everyone is entitled to an opinion, but it’s obvious that you are always looking for balance, which is hard to come by. My congratulations on your work.
For my part, when I look at the report entitled Summary Report for Statutory and Voted Budgets by Lines of Business, when you say 2021-22 “Main Estimates”, is that the estimate of expenditures incurred for the year 2021-22?
Senator Moncion: It’s for the current year.
Senator Massicotte: This is not last year’s budget? These are the current probable expenditures that we will incur, is that correct?
Senator Moncion: Which report are you looking at, senator?
Senator Massicotte: Your Summary Report for Statutory and Voted Budgets by Lines of Business, on page 6 of 10, the left-hand column. Under “Lines of Business,” the Main Estimates are for 2021-22, correct?
Senator Moncion: Yes.
Senator Massicotte: Is it the 2021-22 budget or the likely expenditures?
Senator Moncion: No, it’s the budget.
Senator Massicotte: A budget is prepared based on the previous year’s budget.
Senator Moncion: Yes.
Senator Massicotte: What are the likely current expenditures in 2021-22? Are they close to $115 million?
Senator Moncion: No. I’m going to ask Mr. Lanctôt to respond because there were savings, too. It’s in the quarterly reports when they come in. Maybe Mr. Lanctôt could show us where we are in the budget — what are the current amounts?
Mr. Lanctôt: Yes. Thank you for the question. Unfortunately, I don’t have the exact number, but yes, the forecast for 2021-22 is slightly under budget because there are vacancies in the Senate, and other reasons why we are getting less than what we budgeted.
Why are we showing the comparison? It’s to have a consistent basis, because we always create our budget based on a certain number of senators, because we never know when the senators will be appointed.
So our budget always includes 103 senators, to make sure we have the budget. If we used the actual number of senators, with about ten empty seats, we would not have enough budget. That’s why we always compare to the same base number, which means our projections are lower than our budget, right now.
Senator Massicotte: So when we say we have a 5.4% increase, it’s actually more than that?
Mr. Lanctôt: The 5.4% figure is consistent when compared to our current budget. When we get the real numbers for the year — and we think our spending will be lower, as I was explaining, because of the empty senatorial seats and the decline in activities that didn’t pick up at the rate we anticipated last year — we’ll be able to see why our projections weren’t accurate this time.
Senator Massicotte: Does increasing the number of senators to 103 have an effect on this year’s $58.816-million budget? When you use the hypothetical number, does it have an effect on that number?
Does the number of senators affect the administration’s budget?
Mr. Lanctôt: Not the administration’s, but we see a lot of variation in the number of senators. There are some expenditures for administration, for example, equipment for senators paid for by the administration. So, yes, there is an effect on indirect spending, but it is a smaller amount.
[English]
The Chair: In the last several years since I’ve been in CIBA, we’ve presented the estimate as a budget number as opposed to an actual comparison. The actuals compared to budget is substantially lower. We’ve saved $8 million to $10 million every year for the last several years, because we planned for fewer senators and because of the pandemic and hybrid sittings. If you do a budget based on the actual versus budget, like many corporations do, you will get a distorted number because things change dramatically from year to year.
Every quarter, we report what the actual spending is compared to the budget, but the planning is done based on budget to budget. On a quarterly basis, we report to this committee and externally what the actual expenditures are compared to what’s in the budget, and we save around $10 million.
Senator Massicotte: I’m aware of that. The difficulty I have is that when you develop a budget based on another budget, any errors or savings are inherently lost. In other words, it becomes an increasingly inflated number, because you’re not adjusting for the reality at any point in time. It’s budget against budget against budget. When you look at a 5.4% increase or the 8.6%, it is off by a couple of percentage points.
The Chair: It is, but the reverse side of that is something even worse where the numbers would go up 20% one year, then down 8%, then up 15% and down again based on the realities of the pandemic and so many differences that occur year to year, especially in terms of planning for the number of senators, which the administration really cannot plan for.
Senator Massicotte: My concern, as is typical in government, is that with any organization, there is an inherent demand for more employees. Everyone has great ideas about why we should employ more people to deliver better service. That never ends.
In the government, every 10 years we have a recession and there’s a cleansing process. Finally, we get back and there’s a significant reduction in cost, because we have no choice. Private enterprise has no choice; they are constantly competing. There are lots of numbers publicly available, and you can examine whether they’re efficient and spending every dollar wisely in a private enterprise.
In the government, it is difficult, because the arguments are valid. Senator Moncion is looking for balance. Where is the equilibrium? It’s a tough call. It’s difficult. I’m not putting myself out there for your judgment. There is a risk that it keeps going and going. When you look at 5.4% and 8.6%, these are big numbers.
The Chair: Hence, a better number to focus on is staffing, because staffing drives the vast majority of every expense. Staffing is something that is tightly controlled by the subcommittee. I think that’s what the number is. If you look at the staffing over the last couple of years, it has gone up, but the large increases you see are the carry-forward of retroactive salary increases. Unfortunately, we had COVID in 2021, and we get the full impact in 2022. Staffing is the number to focus on.
Senator Massicotte: Appendix C — that was internal for several years — is very good. It’s new information, and it’s telling.
On that note, if you look at the big increases relative to five years ago, Property and Services is up quite a bit. Finance and Procurement is up. You’ve got the legal sector here too. Could I ask you to give us a tone? Why are we up so significantly in those three areas, which would explain the differences between the budget this year and what we have incurred in past years?
Senator Moncion: Thank you for the question.
The first thing I will tell you is that the Senate has changed quite a lot in the last five years. These are comments that we received from our directors. When we look at increasing staff, we usually have reasons why these increases are needed. A lot of times, they are associated with overtime that is being done by staff. That is one explanation. Mr. Lanctôt will provide you other explanations. But as a committee, we’ve always been prudent about adding more staff. However, I would say that the Senate has changed dramatically in the past five years.
We have seen the numbers go up. It has been a concern of the committee. Every staff member that was added was hired for the right reason.
Pierre, do you want to add to a few comments? I know you wanted to answer some of the comments, including this one.
Mr. Lanctôt: Thank you, senator.
First, if we look at Property and Services, I will start with the FTEs. They are approved every year. It is reviewed by the committee and voted on by CIBA. To explain the increases in Property and Services, there are two main reasons. When the Senate moved into the new building, it became responsible for some of the building maintenance, which the Senate was not directly paying for when it was part of Parliament. The second reason is that we have more shuttle buses since we moved into the new building, and we have different properties where we need bus services. Property and Services has had a big increase because of those two factors.
If we look at Finance and Procurement, as you mentioned, there are also two main factors. In the early years, we added the new resource management system, which was a new responsibility. The new resource management system manages all the HR, finance, procurement and asset management systems, as well as configuring, maintaining and providing training for those systems. That’s the bulk of the increase in FTEs.
I’m not sure which other ones you mentioned, senator. The third —
Senator Moncion: Legal.
Mr. Lanctôt: In recent years, there has been an increased volume in legal activities. Two years ago, there was a request for specific resources. There was a request for a certain number of resources. It was done by scale and there were three approved two years ago and another one this year, but that’s based on the volume of activities the group has to do.
[Translation]
Senator Carignan: I’m trying to understand and I’m not finding it particularly easy. Our office budget would increase by 2%. However, we had to make a retroactive payment for an 8% salary increase. Basically, I have 8% less money left than last year. Yet the needs are the same.
How should I manage my office? Can I give pay raises or do I have to cut hours per person so I can give pay raises to others? Will I fire employees and hire others at lower salaries? In an environment of rising labour costs, how can I operate on an 8% lower budget this year?
Senator Moncion: You’ve found all the answers, because you’ve found ways to reduce your expenses, either by cutting hours or elsewhere. I’m going to ask Pierre to answer more specifically.
Senator Carignan: So your message is to cut our hours and fire our employees?
Senator Moncion: We are not talking about dismissal, but rather about finding solutions to more proactively manage the budgets of senators and offices.
Senator Carignan: I will listen to what Pierre has to say. But I would like to point out to him that his $2.3 million, which is 8%, is added to the Senate budget. He is also adding FTEs for the positions that he needs.
Now I’ll listen to Pierre’s comments.
Mr. Lanctôt: In the budgets, we see a difference in the allocation of salary increases for senators’ offices versus administration offices. For senators’ offices, there is an annual increase, as a whole, that includes both salary and non-salary expenses. In recent years, the increase has been about 2% per year, which is equivalent to the rate of inflation. For the administration, over the years, no increase has been given in terms of salaries.
When a collective bargaining agreement is signed or CIBA approves salary increases, then the administration receives an amount for those increases. That is why we are seeing a higher increase here, as this year we are catching up for four years.
For senators’ offices, the overall budget increase, including the salary portion, has been included every year.
On the other hand, there is still a variation if you look at the cumulative salary increases for the last four or five years from what was authorized due to inflation or office budget increases. There is a variation of about 2.5% for which funding would not have been issued. This was a decision that was made last spring. If you recall, the committee had looked at this, and the decision was made not to add that increase.
Senator Carignan: If I understand correctly, you are forcing us to give pay raises, retroactively, to our staff. Because that’s what happened this year. We negotiated agreements with our employees, with our staff. Then someone from the other side came in and said finally, you have to give them an 8% pay raise, plus the raises that have already been paid. If you can’t get there, cut their hours or fire them, and hire people for less.
One person needs to manage their budget. Either I manage the budget, and there’s no third party interfering with the amount with external increases, and contradicting what I establish, or you manage it yourself. It has to be one of the two, because we make decisions based on the parameters we have, and then you come in and change the parameters later, which puts us in extremely difficult situations.
Now we have to cut back on the hours of our staff. I told someone, “I can’t take you on full time anymore, find a new job.” I hired someone part-time. That’s not right; it hurt my feelings, and hers. You can’t have two entities managing the staff.
Second point: inflation. I understand the committee looked at that. Inflation was at 2% at the time. Now we know that inflation will be 5%. So instead of heading for the wall, knowing that the wall is approaching very quickly, wouldn’t it be wiser to change the inflation rate, not to put in 2% but rather a higher reserve amount so as to avoid hitting the wall? We know the wall is coming.
Senator Moncion: The decision of your committee this year was to keep inflation at 2%. There have been discussions about prudent management of the funds that are used by the Senate, and we believe that we are able to manage with the funds that we are presenting to you.
Senator Carignan: So we can suggest that we not follow the committee’s recommendation later?
Senator Moncion: You can.
[English]
The Chair: Senator Carignan, to be fair, you do have a valid point. It was an issue that arose at the beginning of this year. At that time, the CIBA Subcommittee on the Senate Estimates and CIBA looked at it very carefully and the decision was made to really hold the increase. You do have a valid point whereby the Treasury Board made a recommendation and we will also make a recommendation. In a sense, the staff got a raise that was higher than we had expected. So it was an issue. There was a conscious decision made at CIBA not to increase the budget. In hindsight, you can question that decision, but the decision was made at CIBA not to do that. However, you have raised a valid point and I think many other senators have raised a similar point.
Senator Omidvar: I’ve raised this point at previous CIBA meetings, the discombobulation this has created in staff offices. I understand the decision-making process, but I would imagine that CIBA wants to find a systemic solution to the “too many cooks in the kitchen” issue, because this will arise again and again and again, especially given whichever way inflation is going. We may be holding the bag in our staff offices for another increase two years down the road of 5% or more, which I’m sure is justified for the staff, but if our budgets do not accommodate that, then we are really excavating the capacity of senators to manage their staff. It should require a systemic approach to this.
The Chair: I think you do make a valid point. It is an issue, and I’ve noted it. I will take another advisement to see what systemic solution we can use on an ongoing basis. It is a valid point that both of you have raised.
Are there any other questions? Can I have a mover for the following motion:
That the eleventh report from the Subcommittee on Senate Estimates relating to the Main Estimates for 2022-23 be adopted.
It was moved by Senator Moncion. Honourable senators, is it your pleasure that the motion be adopted? On division?
[Translation]
Senator Carignan: May I move an amendment?
[English]
The Chair: Yes, you may.
[Translation]
Senator Carignan: I move that the budget, with respect to the inflation rate used, show an inflation rate of 3.5% instead of 2%.
[English]
The Chair: Colleagues, is there any appetite to increase the amount to 3.5%? I personally think it’s not fair to the subcommittee. If it is something you want to do, we can have the subcommittee look at that again to see whether that is something we should do rather than do a vote here, but I’m open to suggestions.
I think the number that was used by the Senate Estimates Subcommittee was a prudent one. To go any higher, it would raise the budgets even higher than we otherwise put forward.
[Translation]
Senator Carignan: Could we suggest to the committee and to the officials that we do the exercise again with the 3.5% inflation rate option, to see what effect that will have on the numbers, and come back to it at another meeting where we can see the result of a 3.5% inflation rate in real numbers?
It seems to me that it would be wiser that way, to make an informed decision.
Senator Saint-Germain: I share Senator Carignan’s concerns and so does the committee.
I think there is another solution. The inflation rate is set by Treasury Board for all public agencies. I propose that we do a mid-year review and that we see the state of inflation and its impact on budgets. At the time of that review, we could amend our budget; this will be all the more possible because we still have a good financial reserve, thanks to the way the budget was planned.
First of all, we have this planning for 103 senators all year, which in itself gives us a reserve. Since I’ve been here, there have never been 103 full-time senators. There is also the uncertainty with respect to the evolution of the pandemic; there are possible savings, particularly for the committee budget.
I think that the mid-year review could be a solution; that would actually allow us, depending on how things go, to make a correction, and we would have the means to do that. That’s my proposal.
Senator Carignan: I think that’s wise, except that given the time frame, mid-year should be April 1, because we’re going to know the inflation rate on December 31. By the time we revise that, there will also be economic updates from the government, so we should aim for a revision around April 1.
Senator Saint-Germain: In fact, at mid-year, we will still have a budget before the end of the year, and at that time, we would check on the difference between the budget actually spent at mid-year, inflation, and the budgets that have been allocated, to see what the gap is. Since we would have — in fact, we will have — a significant reserve, we could then make that decision and draw from the reserve to avoid budget shortfalls by branches, offices, caucuses and groups by the end of the year.
[English]
The Chair: Senators, rather than debate the timing of the review here, why don’t I take this away as an action item to see the most appropriate date, given the way things stand, and bring it back to the committee? We will decide that with the Senate Estimates Subcommittee and bring it back here at some point that works based on timing and the data, et cetera.
Colleagues, is it your pleasure that the motion be adopted?
Hon. Senators: Agreed.
The Chair: I declare the motion carried. As usual, colleagues, I will present the Main Estimates report in the Senate.
Colleagues, we are moving on to item 4. Senator Saint-Germain, we are running a bit behind schedule and I’m worried about getting to certain items that are very important later in the agenda. If you don’t mind, I’d like to defer this to the next meeting of CIBA.
Senator Saint-Germain: I would agree, but I insist that we discuss item 19 when —
The Chair: Yes. That’s what I’m saying. That’s why I want to hurry it up. Thank you.
Colleagues, if it’s okay with you, we’ll defer item 4 to another meeting.
Item 5, colleagues, concerns the division of roles and responsibilities between CIBA and the new Standing Senate Committee on Audit and Oversight. Shaila Anwar, Clerk Assistant; Anne Burgess, Senior Parliamentary Counsel; and Pierre Lanctôt, CFO, have joined the meeting by video conference.
Colleagues, as background, with the creation of the Standing Senate Committee on Audit and Oversight, it is important to clarify the division of roles and responsibilities between CIBA and Audit and Oversight vis-à-vis the financial and audit reports. Senator Massicotte, this is a question I think you had raised as well.
Over the last several months, I have met with the Chair of AOVS, Senator David Wells, several times to discuss this topic, and we have worked very closely to clearly identify the functions for both committees. The table in your package highlights the role of each committee for the anticipated activities. All CIBA steering members and AOVS members are comfortable with their allocated responsibilities. The recommendation is now being presented to CIBA for approval. Are there any questions or comments, colleagues?
Senator Massicotte: I wouldn’t mind somebody very briefly describing to me how they see us, this committee, like a board of directors, which means we are responsible for planning and managing actual results, and the Audit Committee. How do we see the division? Us, as we’re managing the institution —
The Chair: The table shows that exactly, but I will gladly go over that with you because that’s an issue several members have raised, and I’ve discussed it with Senator Wells on several occasions. We’ve come to a compromise. In a way we have to work it through and there are many things that have to fall into place, starting with this table. I’m sure this table will be modified as we get more experience at it.
Senator Massicotte: The $800,000 budget for the Audit Committee emanates from that definition?
The Chair: That was really a placeholder more than anything else at this stage.
Senator Massicotte: Thank you.
The Chair: Can I have a mover for the following motion:
That the recommended division of roles and responsibilities be approved; and
That the Office of the Law Clerk and Parliamentary Counsel, in consultation with the Committees Directorate, be instructed to draft consequential amendments to the Senate Administrative Rules in order to implement these recommendations.
Senator Moncion moves the motion. If any senator wishes to abstain, please raise your hand or let me know. Seeing no objections, I declare the motion carried.
Colleagues, the next item concerns the proposed amendment to the Senators’ Office Management Policy with respect to allowing advance payments to be issued to senators’ staff for training and educational programs in advance of successful completion. We have Isabel-Andrée Lavigne, Director, People, Culture and Inclusion; Geneviève Garneau, Senior Advisor; and Pierre Lanctôt and Marc-André Roy from Parliamentary Counsel who will be joining us as well. As usual, we’ll have time for questions. Can you give us a brief presentation on this, please?
Geneviève Garneau, Senior Advisor, Talent Management, Human Resources Directorate, Senate of Canada: Good afternoon, honourable senators. The note before you is a proposal of the steering committee to amend the SOMP to allow more flexibility in supporting staff who wish to engage in external training programs. Currently, staff pay for any tuition and material fees up front and submit a financial claim for their expenses once they have successfully completed their courses. The financial burden this represents is prohibitive for some staff. To address this, the steering committee proposes to amend the SOMP to allow advance reimbursement whilst ensuring they remain accountable in completing their studies. If there are any questions, we’d be happy to respond. Thank you.
The Chair: Are there any questions, colleagues? This is really to give us more flexibility because some people have to lay out a certain amount before they go to the university, and we want to give them the ability to do that rather than waiting and they don’t have the funds to make a down payment for many courses. We felt this was a prudent way to give them flexibility. They still have to sign a document saying they will compensate the Senate if they choose not to complete their degree.
Colleagues, can I have a mover for the following motion:
That the SOMP be amended by adding the following section after section 5.2.6:
5.2.7 Notwithstanding paragraph 2.4.2d, senators’ staff member may, with their senator’s written approval, request a cash advance to cover the cost of their registration, tuition, and/or training material.
An agreement between the Senate and the staff member, through which the staff member undertakes to reimburse the Senate fully should the course not be successfully completed, must be signed before a cash advance payment can be made to the staff.
Senator Dean moves the motion. Any objections, senators? Seeing no objections, I declare the motion carried.
Colleagues, if you don’t mind, I’m going to skip item 7. We really do need to get to the in camera portion. We’ll delay item 7 to the next meeting.
Item 8 is a travel decision for the Joint Interparliamentary Council. Senator Dawson, you wanted to speak on this.
Senator Dawson: Very briefly, I talked to the chair of JIC. As you know, APF is hosting a conference in July, and the preparatory meetings are being held in January and February, and Canada could not participate unless JIC gives them permission for the members to be able to participate in those committees. Since we’re spending that money to host the conference, we should be, but I think the chair of JIC can confirm that he will assure permission is granted for the organization of events that are happening in Canada.
Senator Plett: He will assure you that he will make an effort to do that.
Senator Dawson: That’s all I have ever asked of anybody.
The Chair: Do we need a motion for this?
Senator Dawson: If the chair agrees, there’s no problem.
The Chair: Okay. Let’s move on to item 9, which is the forward agenda for the Subcommittee on Long Term Vision and Plan. This is really an overview of items that will be considered by the Subcommittee on LTVP this fall. The agenda is straightforward and for information only.
Colleagues, are there any questions for Senator Plett, Shaila Anwar or Caroline Morency, who are on the call? As I said, it’s for information, so if you have any questions, you can let any of those three people know.
Colleagues, items 10 to 12 are not are really urgent, and I feel that we should move in camera because there are three items on the in camera portion that we need to deal with sooner rather than later. If I may have your indulgence, we’ll defer the other three items to the next meeting and we will go in camera.
Is there any other business senators wish to raise in the public portion? I see no hands, so we will go in camera. Thank you, all.
(The committee continued in camera.)