THE STANDING COMMITTEE ON INTERNAL ECONOMY, BUDGETS AND ADMINISTRATION
EVIDENCE
OTTAWA, Thursday, December 14, 2023
The Standing Committee on Internal Economy, Budgets and Administration met with videoconference this day at 8 a.m. [ET], pursuant to Standing Order 12-7(1), to consider financial and administrative matters; and in camera, pursuant to Standing Order 12-7(1), to consider financial and administrative matters.
Senator Lucie Moncion (Chair) in the chair.
[Translation]
The Chair: Good morning. Thank you for being here so early for this meeting.
My name is Lucie Moncion. I’m a senator from Ontario, and it’s my privilege to chair the Standing Committee on Internal Economy, Budgets and Administration.
I would like to go around the table and ask my colleagues to introduce themselves, starting on my left.
Senator Loffreda: Good morning. Senator Tony Loffreda, Montreal, Quebec.
Senator Saint-Germain: Raymonde Saint-Germain from Quebec.
Senator Forest: Good morning. Éric Forest, Gulf Division, Quebec.
[English]
Senator Boyer: Yvonne Boyer, Ontario.
Senator Francis: Senator Francis, Epekwitk, also known as Prince Edward Island.
Senator Quinn: Jim Quinn, New Brunswick.
Senator Smith: Larry Smith, Montreal, Quebec.
Senator Plett: A very tired Don Plett, Landmark, Manitoba.
[Translation]
Senator Seidman: Judith Seidman, Montreal, Quebec.
The Chair: Thank you very much.
Welcome to all those across the country who are following our proceedings today.
Honourable senators, the first item on the agenda is the approval of the minutes of November 30, 2023, which are in your bundle. Are there any questions or amendments? Can someone move the following motion:
That the minutes of Thursday, November 30, 2023, be adopted.
Senator Quinn so moves.
Is it your pleasure, honourable senators, to adopt the motion? I see no objection, so I declare the motion carried.
The next item on the agenda is the 21st report of the Subcommittee on Senate Estimates and Committee Budgets concerning the Main Estimates 2024-25.
Subcommittee chair Senator Forest will present the report. Pierre Lanctôt, Chief Financial Officer, and Nathalie Charpentier, Comptroller and Deputy Chief Financial Officer, will assist him. We welcome you both.
Senator Forest, you may begin your opening remarks.
Hon. Éric Forest: I’ll summarize the report. I believe I talked to some of you not long ago.
Honourable senators, I have the honour to present the 21st report of the Subcommittee on Senate Estimates and Committee Budgets, which recommends adoption of the Senate Main Estimates for 2024-25.
[English]
We have received a copy of the SEBS report with the appendix and our recommendation in the CIBA bundle.
[Translation]
I won’t delve into all of the report’s details. I’m sure you’ve read it with great interest. I just want to highlight a few points.
First, the budget was based on the planning assumptions that there will be an average of 100 senators during the fiscal year and that the parliamentary calendar and Senate operations will be similar to a typical year.
Second, the report is based on four principles: maintaining a high quality of service to senators; support for environmental measures in the workplace; good stewardship of public funds; and focus on supporting core activities.
Third, your subcommittee studied the estimates in light of the current economic situation in Canada. We reiterated the mandate given to the Senate Administration in the previous fiscal year, which was to reduce expenditures by finding efficiencies in the activities and services provided to the Senate and to maintain a cap on the number of full-time positions across the Administration.
Fourth, as a result of the subcommittee’s review of the budget requests, the Senate’s total main estimates for fiscal year 2024-25 are $134,868,514. This is an increase of 6.5% over the previous year.
I would add that, over the past five years, the Senate has spent on average 86% of its annual budget.
Having carefully studied the Senate’s main estimates for 2024-25, your subcommittee makes the following recommendations: that the Internal Economy Committee approve the Senate’s main estimates for 2024-25, which total $134,865,514, a 6.5% increase over fiscal 2023-24; that the committee approve the 2024-25 budget adjustments listed in appendices A and B; and that the committee approve the proposed budget strategy.
I’m here today with Pierre Lanctôt, Chief Financial Officer, and Nathalie Charpentier, Comptroller and Deputy Chief Financial Officer, who are available to answer all technical and specific questions about the budget.
I recommend adoption of the report once we’ve answered your questions.
The Chair: Thank you very much, Senator Forest. Are there questions or comments about the budget, colleagues?
[English]
Senator Seidman: Thank you for what I’m sure was the great labour that SEBS endured to get this done. Thank you to the committee and to you, Senator Forest. It is much appreciated. I know it’s a challenge.
I do have a particular question, because I know there has not been, for a long time, an increase in senators’ living expenses in the National Capital Region. Senators are actually struggling. I even hear senators saying to me that they won’t be able to be in Ottawa in the Senate for several days at the end of the fiscal year, because they have no money for living expenses in their budget anymore due to very large increases in hotel accommodations, specifically.
In your report, I read that the gross amount put for senators’ living expenses in the National Capital Region will be increased. You haven’t given us the additional proportion per senator’s office, so I would appreciate if you do have that individualized information.
[Translation]
Senator Forest: Happily.
We considered this situation, which was a case of false economy. It forced our senators to travel, which cost more than staying in the capital region. The previous cost of living allowance was $26,870, and that will go up to $37,000 this year. That adds up to nearly $974,400 with other costs involved. This will enable senators to extend their stay in the capital instead of staying here for three days. In essence, it will go up from $26,850 to $37,000.
Mr. Lanctôt or Ms. Charpentier may want to elaborate.
Pierre Lanctôt, Chief Financial Officer, Finance and Procurement Directorate, Senate of Canada: I would just clarify that, when you said this year, of course, we’re talking about 2024-25.
Senator Forest: Sorry, I’m already in 2024.
Mr. Lanctôt: That’s because we’re talking about the budget year, but I just wanted to make sure we’re actually talking about 2024-25.
[English]
Senator Seidman: I give credit to the hotels in Ottawa raising their prices, but I should also give credit to really creating serious situations for senators’ budgets to the airlines. There are senators who can no longer get direct flights to Ottawa. As a result, they have to come a day early and stay an extra night in order to make their committees and Senate sittings. It’s a pretty serious situation. I would like to speak for senators and for what I’ve been hearing from senators about this situation. It’s not frivolous. It’s not as if senators want extra money in their budget to be here in a frivolous way. However, they are in a serious situation because of airlines cutting flights and because of hotels raising prices. I want put that on the record so it’s clear.
[Translation]
Senator Forest: If this is about the points system, I’ll let Mr. Lanctôt explain the measures that were taken in more detail.
[English]
Mr. Lanctôt: There used to be a supplementary budget for senators who were meeting certain conditions. Even if the budget was $26,000, there was a possibility to obtain more. It was complicated; so was its administration. It was a burden on both senators’ offices and Senate Administration to manage. We now have incorporated it all, so everybody will get the $37,000. There won’t be an additional budget. This budget covers an additional two nights. At the rate that senators pay, they would be able to afford two more nights in the capital region per week.
What is proposed is resolving the issue that some senators were facing. We are also increasing the daily rate for hotels because the committee recognizes that hotels are more expensive than they used to be.
Senator Seidman: How long has it been since we had any change in this?
Senator Forest: For the nights in the budget?
Mr. Lanctôt: Two years.
Senator Forest: For the next year, for 2024-25.
Senator Seidman: This is for the next year. But for how many years has it been —
Senator Forest: Two years.
Senator Seidman: There hasn’t been a change in two years, so pre-COVID.
[Translation]
Senator Forest: For your information, it should be noted that, typically, 72% of senators do not use the entire budget allocated to them. There will be a significant budget increase of $974,400, but 72% of our colleagues will not use the entire amount allocated, which enables us to steward our own budget and understand how much room to manœuvre we have. This will also greatly simplify administrative procedures, which were burdensome for the Senate Administration and for senators.
[English]
Senator Seidman: Thank you very much. I appreciate that.
Senator Quinn: Thank you, Senator Forest, for an excellent report.
I want to build on what Senator Seidman said. When you become a member of CIBA, I guess you become more popular amongst your colleagues. I have had a number of senators talk to me about the same issue, living expenses and whatnot. There was a nuance I wasn’t understanding. One was that there is a basic living expense and there is an additional amount. That’s what you were referring to.
Some of those folks who have been trying save their budget by staying the weekend, people who travel a long way, have told me that they have opted to stay, but then they have trouble claiming their per diems and whatnot during the weekend. Does that increase in their budget fix that issue as well, or will there still be issues for folks who save money by not travelling back long distances and staying here yet are incurring per diem-type costs? Does it fix that?
[Translation]
Senator Forest: The goal is to fix the problem by allocating the budget. Previously, we had a lump sum of $26,800, and we could ask for an additional $7,500, which meant the Administration had to go through a whole verification process, looking into why you were staying here, whether you had a committee on Monday, and so on. This is about trust and senators’ responsibility. This significant increase from $26,800 to $37,000 provides the financial conditions people need to stay here on weekends.
[English]
Senator Plett: I want to add to Senator Forest’s answer to Senator Quinn. Of course, we have increased not only the amount per night but also the number of nights. That directly speaks to your question, Senator Quinn. I want to remind all senators that it is laudable for us to occasionally spend the weekend if the weekend will be short and it possibly saves on travel. However, I remember clearly when I got appointed to this August chamber, and I went through my briefing, that I was reminded very clearly, “Senator, you are a senator from Manitoba, not from Ottawa. You have a responsibility to spend time in your riding and not just come to Ottawa and stay here.” The days of train travel are over. We have a responsibility in our provinces.
If we have to stay here late on a Friday and even into Saturday, and we’re flying back to Manitoba, or into New Brunswick, just for Sunday, that is probably not an efficient way of using our time or our money. However, when we have a full weekend, we owe it to our constituents to be in our constituencies to do the work there that needs to be done. I think this, Senator Quinn, deals with both of those things.
Senator Quinn: Thank you.
The Chair: Are there any further questions on this item?
[Translation]
Senator Forest: Before we vote, I want to thank the committee members, Senator Plett, Senator Tannas, Senator Loffreda and Senator Dalphond, as well as the people who keep an eye on things and make sure we’re doing things properly. I especially want to thank Pierre, Nathalie and Pascale, who accompanied us today, as well as all the directors who really wanted to meet the demands and objectives we set for them at the beginning of the fiscal year. Thanks everyone, and congratulations.
The Chair: As there are no more questions, Senator Forest moves the following:
That the 21st report of the Subcommittee on the Senate Estimates and Committee Budgets concerning the 2024-25 Senate Main Estimates be adopted and introduced in the Senate.
I see no objection, so I declare the motion carried.
The next item on the agenda is the budget deficit for the 30th annual session of the Parliamentary Assembly of the Organization for Security and Co-operation in Europe, the OSCE. Esteemed colleagues, you may recall that we began our discussion on this topic last time. We’ll pick up where we left off then. Jeremy, thank you very much for being with us this morning. I don’t know if you want to go over the conversation we had. Then we’ll go to questions. Given that we already discussed this subject at the last meeting, I’d like to spend a maximum of 10 minutes on it if that’s okay with you. Jeremy, you have the floor.
Jeremy LeBlanc, Clerk Assistant and Director General, International and Interparliamentary Affairs, Senate of Canada: Thank you, Madam Chair. I’d like to take a few moments to provide additional information about the deficit associated with the 30th Annual Session of the OSCE Parliamentary Assembly in light of the questions that came up at the end of my appearance at the last committee meeting. Just as a reminder, the biggest factor contributing to the deficit was attrition penalties charged by hotels reserved for delegates.
[English]
Senator Loffreda asked about the contract that we had with the hotels and whether they were more restrictive than ones we’ve had in the past. While there were slight variations between the contracts signed with each of the five hotels, their broad terms were not dramatically different from those that were in place for other conferences that the Parliament of Canada has hosted, nor were they atypical for large-scale group bookings.
That said, the degree of flexibility we had within those contracts varies from one hotel chain to another and from one market to another. The contracts with the hotels in Vancouver were somewhat less flexible than those we’ve had in other cities, in part due to the time of year at which the event occurred, which was in peak tourist season, and where, in some cases, we were competing against other groups in order to secure blocks of rooms.
He also asked about provisions within the contracts that would allow us to reduce our liability. There are force majeure clauses in these contracts that provide protections against large-scale catastrophic events. We were able to invoke those clauses in 2020 when the pandemic forced us to cancel the hosting of the conference that was originally scheduled for July of that year. We did so without incurring any penalties. The situation we encountered this year did not fit within those terms, however.
As outlined in the briefing note, there were provisions in some contracts allowing us to release up to 15% of the rooms for resale, and we released the maximum number allowed in those cases. We were able to negotiate a release of some rooms with one of the hotels even though there was no such provision in its contract. Furthermore, we were able in some cases to negotiate changes in the manner in which occupancy was calculated so as to lessen the penalties. These steps did allow us to reduce our overall liability, but not significantly enough to avoid a deficit.
[Translation]
Senator Loffreda and Senator Forest both asked how we could prevent this kind of thing from happening again with conferences we’re hosting in 2024.
As I said during my last appearance, we are working closely with the contracting team to negotiate more flexible terms, such as transferring more of the responsibility to the delegates when they cancel a reservation, ensuring that unoccupied rooms are always transferred to the hotel’s general inventory and the fees deducted from the total obligation when rooms are resold, and including cancellation clauses with more flexible deadlines.
We’re also revising our projected attendance downward to limit our financial exposure.
[English]
I hope that this additional information is useful. Of course, I’m available to respond to other questions that the senators may have.
[Translation]
The Chair: Thank you, Mr. LeBlanc.
Senator Saint-Germain: I’ll be very brief. I want to point out that, as soon as Mr. LeBlanc and his team realized the situation, there was total transparency about the information provided to the Joint Inter-Parliamentary Council. As we saw this morning, the team has taken steps to ensure that this regrettable situation doesn’t happen again. It’s important to remember the context: decisions were made during the pandemic. There was some degree of unpredictability. We want to make sure this kind of thing doesn’t happen again. As we just heard, measures have been taken. A plan is in place. I want to salute Mr. LeBlanc and his team for planning so diligently and taking corrective action.
Thank you, Mr. LeBlanc.
[English]
Senator Plett: I think I heard Senator Saint-Germain refer to this happening during the pandemic. This happened in July of last year. There was no pandemic.
Senator Saint-Germain: There was long-time planning before it, so some of the decisions and negotiations with the hotel were made during the pandemic.
Senator Plett: Okay. Thank you for that. I appreciate the transparency. I have served on JIC, as a matter of fact, as a co-chair for quite a while, and I have always appreciated Mr. LeBlanc’s transparency. We see it here again.
However, I am not sure how we can just sugar-coat this and pass this off. It’s a deficit of over a half a million dollars. Now we’re hearing that we have a couple of senators who can quite easily step in and ensure that this never happens again. Well, if we can that easily ensure this never happens again, I don’t know why in the world it would have ever happened in the first place.
I’m extremely disturbed by this kind of a deficit. First, what has the House of Commons done? Have they picked up their 70% of this? What was their reaction?
Mr. LeBlanc: Their reaction was similar to yours in terms of disappointment and concern about the deficit that was incurred, wanting to understand how it happened and what measures were put in place to avoid a reoccurrence of such events when we host conferences. Ultimately, they did accept that the expenditures were incurred. We had a contractual obligation to pay it, and they are prepared to pay their 70%.
Senator Plett: Obviously, we are obligated to do the same thing. We have a contractual obligation. I just want it to be on the record that I can’t understand why we would not have entered contracts that had some — I recall correctly at the last meeting, this was largely because we had anticipated delegates showing up who didn’t show up. To me, that should be a fairly easy solution. If you don’t tell us by this time, here is when we have to give the room back, and if you don’t tell us by the time that we are obligated to give the room back, we don’t have the room. That should be the easiest thing in the world. Whoever made the decision to not do that — I’m not going to say it should be a career-ending move, but it should certainly be one that puts whoever made that decision on the edge. Thank you. But I agree, I don’t think we have much choice other than doing this and working towards it not happening again.
Senator Boehm: Thank you, Mr. LeBlanc, for coming back. I just want to make one comment, then I have a question. You’ll recall that the last time you were here, we talked about best practices learned from other places. The fact is that Canada hosts a lot of international meetings; there are more coming up. This sort of occurrence where some delegates do not show and others do is not unusual. Over time, there have been various cadres in departments developed to handle these things. My only suggestion would be that, in the future, maybe there can be some comparison or discussion as to what the best practices might be.
You mentioned that had your directorate would be absorbing these costs of attrition. It raises the question that if you’re absorbing the costs, then what are you not going to be able to do in terms of other operations and activities you might have planned? Is this going to have a big impact on what you do?
Mr. LeBlanc: Thank you, senator. In terms of consultation, I did note that suggestion from last time, and certainly it is one that we’ll explore with our contracting staff.
The other point I wanted to make in terms of delegates not showing up — indeed, there was a problem with a certain number of delegates who didn’t arrive — was that there was also a problem with delegates who did come to the conference but chose to stay elsewhere. That’s a phenomenon we have never encountered before. I think it was probably associated with the realities of the hotel market in downtown Vancouver.
In terms of the source of that surplus, we’re confident that we will be able to absorb it within the surpluses that exist elsewhere within the administrative budgets of the House and the Senate. We discussed some time ago the envelope for parliamentary associations, which for a number of reasons sometimes has a surplus, even though associations are constrained. There are budget envelopes for committees and for parliamentary exchanges, which sometimes also have surpluses at year end. We are confident that within those envelopes or elsewhere in the administration that we will be able to absorb that without impacting the level of activity.
Senator Boehm: Thank you.
[Translation]
Senator Forest: Questions about budgets are important, but what really makes me nervous is that we’re hosting the Association Parlementaire de la Francophonie, the APF, in early July. How are those negotiations going? Do we have safety nets? Are there measures in place that will enable us to avoid such a terrible outcome?
Mr. LeBlanc: Yes, we are currently negotiating with hotels to determine where APF conference delegates will stay.
As I said, we’re trying to insert a number of measures into the contracts to limit our liability. Negotiations are under way, but our efforts have been rewarded in many ways, and we’ll negotiate more flexible terms than we had for the Vancouver contracts.
Senator Forest: What do you think of Senator Plett’s suggestion about not guaranteeing a hotel room if people don’t respond by a certain date?
Mr. LeBlanc: We have to improve the alignment of dates and the transfer of liability to delegates because a certain number of delegates were no-shows. Liability for fees associated with transferring their rooms was transferred to Parliament, not absorbed by the delegates.
We’ll be a lot clearer in the contracts about liability for hotel rooms if delegates make a last-minute choice not to come.
Senator Forest: Thank you. This kind of thing can’t happen again.
Mr. LeBlanc: Of course.
The Chair: Thank you. You’re at exactly 10 minutes.
Thank you for those explanations, Mr. Leblanc.
Colleagues, we’re at point 4 on the agenda.
Is there anything under “Other matters” that we can make a note of and discuss later? Not seeing any, I’ll suspend the meeting so we can go in camera.
This is the last meeting of the Internal Economy Committee before the holidays. I’d like to take this opportunity to thank my colleagues, our technical support team, Administration employees, the interpreters, stenographers and senators’ staff, all of whom contribute to the success and productivity of our meetings. I’m thanking each and every one of you now because we won’t be back in public.
I wish you all a happy and restful holiday with your friends and family. We’ll meet again in February of next year when our work resumes.
I’ll suspend the meeting for a few moments while we go in camera.
(The committee continued in camera.)