THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, May 3, 2023
The Standing Senate Committee on National Finance met with videoconference this day at 6:45 p.m. [ET] to examine the Main Estimates for the fiscal year ending March 31, 2024.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators, I wish to welcome all of the senators as well as the viewers across our country, Canada, who are watching us on sencanada.ca.
[Translation]
My name is Percy Mockler. I am a senator from New Brunswick and the chair of the Standing Senate Committee on National Finance.
Now, I would like to go around the table and have my fellow senators introduce themselves, starting with the senator to my left.
Senator Forest: My name is Éric Forest, and I represent the Gulf senatorial division, in Quebec.
Senator Gignac: I am Clément Gignac from Quebec.
[English]
Senator Shugart: Good evening. Senator Ian Shugart from Ontario.
[Translation]
Senator Loffreda: I am Tony Loffreda from Quebec.
Senator Galvez: I am Rosa Galvez from Quebec.
[English]
Senator Duncan: Good evening and welcome back. Senator Pat Duncan, Yukon.
Senator Boehm: Peter Boehm, Ontario.
Senator Pate: Kim Pate, and I live here on the unceded, unsurrendered territory of the Algonquin Anishinaabe.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Smith: Larry Smith, Quebec.
[Translation]
Senator Dagenais: I am Jean-Guy Dagenais from Quebec.
[English]
The Chair: This evening, we will resume our study on the Main Estimates for the fiscal year ending March 31, 2024, which was referred to this committee by the Senate of Canada on March 7, 2023.
[Translation]
This evening, honourable senators, we have the pleasure of welcoming the Honourable Mona Fortier, P.C., M.P., President of the Treasury Board.
Thank you, minister, for agreeing to appear before the committee today. Thank you, as well, to your large team.
[English]
The minister is accompanied by members of her team from the Treasury Board of Canada, and I will ask each of them to introduce themselves if ever they are invited to answer a question.
[Translation]
As I understand it, minister, you will be with us for questions and answers, for about 75 minutes.
Nevertheless, we will be as flexible as possible. If need be, your team will be here for the second round.
[English]
We will now hear comments from the minister.
[Translation]
The floor is yours, minister.
Hon. Mona Fortier, P.C., M.P., President of the Treasury Board: Thank you very much, Mr. Chair. It’s an honour to be here this evening.
I am happy to discuss the government’s Main Estimates for 2023-24.
Here with me this evening are quite a few members of the Treasury Board Secretariat team. I’ll list them quickly: Annie Boudreau, Assistant Secretary, Expenditure Management Sector; Karen Cahill, Assistant Secretary and Chief Financial Officer; Samantha Tattersall, Assistant Comptroller General, Acquired Services and Assets Sector; Monia Lahaie, Assistant Comptroller General, Financial Management Sector; Stephen Burt, Chief Data Officer of Canada; Jean-François Fleury, Assistant Deputy Minister, Research, Planning and Renewal; Mireille Laroche, Assistant Deputy Minister, People and Culture, Office of the Chief Human Resources Officer; and Rod Greenough, Executive Director, Expenditure Strategies and Estimates.
I work with them every single day, and I can tell you they are all hard-working people. I am very proud to have them on my team.
I would also like to acknowledge that we are on the traditional territory of the Anishinaabe Algonquin Nation.
[English]
Mr. Chair, as you know, through the Main Estimates and related documents, the government describes how it proposes to allocate resources, ensuring that spending is transparent and accountable to parliamentarians and also to Canadians.
I had the honour of tabling the Main Estimates for the 2023-24 fiscal year on February 15.
These estimates describe a responsible program of government spending that reflects the priorities of Canadians, including investing in Indigenous communities, national defence, the environment and skills development.
The Main Estimates present information on approximately $433 billion in planned budgetary spending for 129 organizations to deliver programs and services to Canadians. That can be further broken down into $198 billion in voted expenditures and approximately $235 billion in statutory spending, already authorized through existing legislation.
The majority of expenditures in the Main Estimates are transfer payments made to other levels of government, other organizations and individuals. Transfer payments make up approximately 60% of expenditures, or just over $261 billion.
[Translation]
Mr. Chair, I would like to highlight some significant changes in statutory spending. They include increases in transfer payments, most notably elderly benefits, the Canada Health Transfer and fiscal equalization; an increase in Climate Action Incentive payments; and an increase in interest on unmatured debt.
I also want to mention that the measures in Budget 2023 will be reflected in the next estimates documents. It’s important to underscore the purpose of each. The budget allocates funding for initiatives within the fiscal framework, and the estimates support the government’s request for parliamentary authority to spend that money.
The purpose of the Main Estimates is not to seek approval for every item announced in the budget. It takes time to develop implementation plans that ensure the sound use of taxpayer money.
My department, the Treasury Board of Canada Secretariat, is requesting $8.9 billion through these Main Estimates.
Of that amount, $5.2 billion is broken down as follows: $750 million for government contingencies; $71 million for government-wide initiatives; $3 billion for the operating budget; $750 million for the capital budget carry forward; and $600 million for paylist requirements.
These central votes support the Treasury Board in its roles as the Government of Canada’s expenditure manager, employer and management board.
[English]
There is also approximately $3.4 billion to make payments under the public service pension benefit and insurance plans, including the employer’s share of health, income maintenance and life insurance premiums. The remaining amount, just under $313 million, supports the operation and activities of the Treasury Board of Canada Secretariat.
Mr. Chair, these Main Estimates reflect our government’s commitment to investing in the priorities of Canadians. Parliamentarians and Canadians must have a clear picture of how the government plans to invest funds so they can hold the government to account. That is why we continue to present information in an open, transparent and accountable manner.
Mr. Chair, I welcome your committee’s review and study of these estimates as well as the study you recently started on the federal estimates process and other finance issues.
That was my conclusion, and I would now be pleased to answer any questions you may have. Thank you, meegwetch.
The Chair: Thank you, minister, for your statement.
Honourable senators, for the first round, we’ll have six minutes each, and then we will look at a second round. Therefore, please ask your questions directly to the witnesses. Witnesses, please respond concisely. In the meantime, the clerk will advise me if we go beyond the six minutes.
Senator Marshall: Thank you for being here tonight, minister. Welcome to you and to your officials.
My first question is very general in nature. It’s an issue we’ve discussed before. It’s regarding the Main Estimates document, the government’s spending plan and all the complications there are tracking government spending.
You released your expenditure plan — that’s what it’s called — for 2023-24, and then a month later, we get Budget 2023 with some new spending. So that’s the revised spending plan. So we’ll see some more new spending plans. We’ll see Supplementary Estimates (A), then we’ll see Supplementary Estimates (B) and then Supplementary Estimates (C). Then we’ll also have the Fall Fiscal Update, and then there is also usually a few little bills tossed in there, like maybe the dental program or something similar.
What’s happening is we have to go from document to document to document to document, which is not really transparent. There is a lot of difficulty in following the money. We have had officials from other departments here before us. I have asked questions; for example, is there any money in the Department of National Defence for the 88 new fighter jets? You can’t tell from the document, but the department can’t tell us either. The same is true for the Volkswagen factory deal for $13 billion. We asked Innovation, Science and Economic Development Canada, or ISED, if there is any money in the Main Estimates for that. They either wouldn’t tell us or they couldn’t tell us.
It’s really a problem to follow the money.
Another problem we have is with the budget. We see money in Budget 2023, we see the money in your Main Estimates for the new fiscal year but the budget puts the money puts back in the old fiscal year, so it looks like the money is in there twice. There are several examples like that. One that comes to mind is with Crown-Indigenous Relations and North Affairs Canada. There’s $2.8 billion for a class settlement for one of the bands.
The last problem I’m going to bring forward is that when you look at the budget document, a lot of the new initiatives indicate that the money is already in the fiscal framework; take, for example, the Department of National Defence in chapter 5. The only problem is that the department can’t tell us where it is in the fiscal framework, so I don’t know if they don’t know or they’re not telling us.
The bottom line is that the Main Estimates document is not transparent. It’s very difficult to follow. As the year progresses, we’re going from document to document to document to document.
There was an effort made a number of years ago with former Minister Brison; he tried a few things, but nothing has happened since.
The issue of transparency — every time somebody stands up and says that the government is transparent, well, it’s not being transparent. When can we expect to see a spending plan that’s transparent and that people can follow? I’m not a novice; I’m used to looking at financial documents. I’m challenged in trying to follow your spending plan.
When are you going to do something with the estimates document so that we know we have a handle on what the government is spending?
Ms. Fortier: Thank you very much for your question and also for sharing how you feel about the information we are providing.
Our government is committed to transparency. It’s also committed to being a responsible financial manager. We provide a lot of information, such as monthly financial results that are reported in the Fiscal Monitor. Departments provide quarterly financial reporting, annual audited financial statements are published in the Public Accounts of Canada, and we also table annual department plans and department results reports.
I was showing you my expenditure cycle. I have to tell you that I remember when former Minister Brison tried to see if it was possible, and after a year, it was not something that worked.
So instead, we decided to go back to the way we were doing it for pretty much ever. We decided to provide more information on the open portal data, on making sure that we have these opportunities to discuss. Therefore, the supply periods also give a good opportunity to give updates on where we’re at.
I would thank you for giving us maybe some solutions that you might have so we can find ways to strengthen the information that we provide to you and to other parliamentarians and even to Canadians. The important thing is that we have really provided —
Senator Marshall: Is my time up? I can carry on?
The problem is that — yes, I realize you’re providing all this information like the Fiscal Monitor, et cetera, but the problem is that you’re flipping from document to document to document, and you’re looking at large sums of money, and you see it show up in two places or you can’t find it, and nobody can tell you where it is. That’s what the problem is.
Former Minister Brison did come up with a couple of things that were worth pursuing. I would encourage you to pursue. I don’t know how anybody on the Finance Committee comes into this committee as a new member and tries to find it. But I did want to talk about —
Ms. Fortier: May I add one more comment maybe? Just to be in the way of offering the fact that I understand there are a lot of financial reports, but we do have to govern a country with different issues going on throughout the year. Therefore, sometimes we also need to assess new spending because of a situation. Therefore, I would challenge the fact that we cannot govern just by reports. We have to govern with a budget allocation, with the fact that we have a Throne Speech, by providing Canadians supports when they need it most.
Again, we can probably always strengthen the supply periods or the expenditure cycle, but we do have to realize that we have to have an opportunity to adapt and to accommodate while at the same time inform you, senator, and others and make sure that we have open information.
Senator Marshall: I appreciate that, but the challenge is trying to follow what you’re doing and what exactly is in the numbers.
[Translation]
Senator Forest: Thank you, minister, for being here. I’m going to continue in the same vein as Senator Marshall, who has a lot of experience when it comes to financial scrutiny.
Take, for instance, the gross debt charges as a share of revenue. The debt-to-GDP ratio is often used to compare countries in the G7. In terms of gross debt charges as a share of total revenue, the latest available figures are from 2021-22. At that time, the gross charges, $24.5 billion, as a share of total revenue, $413 billion, were 59%. That seems like an enviable position to me.
The figures for 2022-23 aren’t available, but it’s estimated that the gross debt charges have gone up by $10 billion. That would put them at $34.5 billion, a 40% increase.
Do the Main Estimates for 2023-24 include a projection of the gross debt charges as a share of total revenue? To my mind, it’s a big ticket item.
Ms. Fortier: First, thank you for your question. I brought a chart that was in the last budget. You’re right that the debt has increased slightly. Historically speaking, however, it’s lower than those of the other countries in the G7. In comparison, Canada has the lowest deficit and the lowest net debt-to-GDP ratio in the G7.
My colleague will tell you — and she can correct me if I’m wrong — that the next economic update will contain a better estimate, and it will answer your question.
Annie Boudreau, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Yes.
Senator Forest: Considering the impact of the pandemic, does a nearly 40% increase, from $24.5 billion to $34.5 billion, in gross debt charges as a share of total revenue seem realistic to you?
Ms. Fortier: I hope I can answer your question. The Minister of Finance tabled a budget that will allow us to bring down the debt. The deficit is projected to decline annually and return to 1% of GDP by at least 2025-26. That’s what the minister indicated in her most recent budget.
Senator Forest: My next question is about something less expensive. I am deeply concerned about official languages. During the review of the Official Languages Act, we talked a lot about the need to put a single agency in charge of coordinating and implementing the act. That’s something the Fédération des communautés francophones et acadienne was calling for.
Bill C-13, which is before the Senate, proposes that the Treasury Board play a leading role in the federal government with respect to implementation of the Official Languages Act.
How do you plan to fulfill that role? Have you estimated the additional capacity you would need to fully assume the important responsibility of protecting official languages?
Ms. Fortier: You’re talking about my wheelhouse. As you know, I’ve also done a lot of work in relation to the modernization of the Official Languages Act. I’m proud to say, obviously, that once the bill is passed — hopefully soon — the Treasury Board Secretariat will have an evaluation and monitoring role, as well as an obligation to play a larger role as a central agency.
Bear in mind that the Treasury Board Secretariat plays an internal role in government operations. The Department of Canadian Heritage plays an external role. The Department of Canadian Heritage still has a role in the approach we are taking.
Nevertheless, the Treasury Board Secretariat will take on a bit more responsibility when it comes to evaluation and monitoring. We want to make sure we have the best of both worlds, as they say. That’s the idea, because the Treasury Board Secretariat doesn’t have the expertise and resources to do what the Department of Canadian Heritage does.
Oversight of coordination and contributions will continue, and the Treasury Board Secretariat will have a larger role in monitoring.
Senator Forest: Do you have a sense of the additional capacity that new role will require?
Ms. Fortier: We are in the process of evaluating that. Ms. Laroche may have a better sense, as far as the details go, but even though the bill hasn’t been passed yet, we are looking into that.
Mireille Laroche, Assistant Deputy Minister, People and Culture, Office of the Chief Human Resources Officer, Treasury Board of Canada Secretariat: As far as the implementation of Bill C-13 is concerned, the 2021 economic update allocated funding to the Department of Canadian Heritage and the Treasury Board Secretariat for the first year of the bill’s implementation. It was about $16 million in total, and the Treasury Board Secretariat’s share was about $3.2 million.
Obviously, the bill is still making its way through Parliament, so amendments are possible. Once the bill has received Royal Assent, we’ll have to re-evaluate the capacity required to implement the legislation.
The Chair: Would you mind introducing yourself, Ms. Laroche?
Ms. Laroche: Not at all. I am Mireille Laroche, Assistant Deputy Minister of People and Culture at the Treasury Board Secretariat.
Senator Gignac: Welcome, minister, and good evening to your officials.
We are fortunate to have all of you here as witnesses, as we examine the Main Estimates. I can’t resist the temptation to bring up the agreement you signed with the public servants. Congratulations on the agreement.
Reaching an agreement with public servants is often a test of survival for the President of the Treasury Board.
Can you confirm that the new agreement will cost $1.3 billion annually, as reported in the media? Does that amount include the $2,500 lump-sum payments that will go to 120,000 unionized workers?
Ms. Fortier: First off, thank you for the kind words. I had an entire team supporting me for weeks. We entered into mediation on April 2 and we were able to reach a deal in the early hours of Sunday morning.
The deal will cost $1.3 billion per year, but keep in mind that the union was initially asking for an agreement valued at $3.1 billion. We were able to negotiate a deal that was less expensive than what had initially been requested.
As for the $2,500 per person within…
Senator Gignac: Is it $1.3 billion the first year, including the $2,500 payments for the 120,000 unionized workers? That means millions of dollars more in the first year.
Ms. Fortier: No, we will adjust on the basis of that amount. When the deal is ratified, we’ll be able to adjust the amount.
Senator Gignac: I see. If my math is right, it’s an extra $200 million or $300 million the first year.
Can I assume — since there are 335,000 or 350,000 public servants and this is just one group — that…
Ms. Fortier: It’s 120,000 workers across the four groups.
Senator Gignac: Is there an expectation of a minimum threshold for the next negotiations? Surely, executives are expecting pay increases as well. Can we extrapolate and say that this is the type of deal that would reasonably be signed in the case of the other collective agreements?
Ms. Fortier: Back in November, when we signed our first agreement, with the financial officers, we agreed on a 2% increase for the first or second year, I can’t remember. This year, the four agreements include a lump-sum payment. That’s a first.
The good news is that we were able to sign an agreement for four years, instead of three. That brings stability and gives us a year and a half before we have to go back to the bargaining table.
As you can appreciate, the agreements have to be ratified, and then we’ll see whether the same approach will be used going forward.
I also think this was a unique set of circumstances. We’ve just come through the pandemic. Employees, or public servants, had to work very hard during the pandemic to administer all the programs that were introduced to support Canadian workers and families.
There was an intention to give them a certain amount, given the situation in 2021. We agreed to a 1.5% increase to compensate for a tough time in 2021.
Will something similar happen again? I don’t know, but we took into account the work people did during the pandemic.
Senator Gignac: I’m not sure you’ll be able to answer my next question in a minute, since it’ll probably take that long just to preface it.
I was pleasantly surprised that the government’s operating expenses are projected to decrease over the next five years, according to the budget.
I’ve been keeping a close eye on public finances for more than 30 years, and I’m looking at the government’s record since 2015. Obviously, spending has gone up by 60%, but as Senator Loffreda pointed out, it makes sense that the numbers are so big, with GDP, inflation and the population all growing.
I want to look at it as a share of GDP, and if you take inflation and population growth out of the equation, federal expenditures as a share of GDP were 13.6% at the time. Now, they’re at 15.7%. I’m not including the transfers to the provinces or the transfers to individuals. I’m looking strictly at direct government expenditures. They went from 6.1% to 8.1% of GDP, and it goes up every year.
What’s your recipe for reducing the share of federal expenditures from 8.1% to 7%? I’m excluding transfers to the provinces and transfers to individuals, and accounting for decreases in direct program expenditures. What steps are you going to take to reduce program expenditures as a share of GDP? We haven’t seen things at this level in seven years.
Ms. Fortier: Thank you for your question. Since it was a long question, I’ll keep my answer short for the sake of time.
I can tell you that our government is very ambitious. We’ve introduced a host of programs. We’ve also put a great deal of effort into reconciliation with Indigenous peoples. You can see that here. It’s one of the major investments in these Main Estimates.
With such an ambitious agenda, we’ve also started thinking, this year, about how we can continue to do things responsibly, taking into account our operational spending. We will probably talk about it this evening, but we are in the process of refocusing spending. I’d be happy to tell you more about that in the next round.
Senator Gignac: It will have to wait until the second round.
Thank you, minister.
[English]
Senator Smith: Welcome, minister. In late 2022, you issued a directive that government workers were to return to the office for a minimum of two to three days a week. You were quoted as saying you wanted to make sure that there was consistency across departments and that the return-to-office mandate was not an issue to be decided at the collective bargaining table.
I’m just wondering, now that you have the tentative agreement with the Public Service Alliance of Canada, or PSAC, could you disclose why and how your team decided to discuss this mandate at the bargaining table? Given that you have made concessions about telework, will other federal workers expect the same concessions in their collective bargaining?
Ms. Fortier: First, thank you for your question. I’m not sure I would use the word “concessions” as the hybrid work has evolved, of course, since the pandemic.
We were in a situation where public servants had to work by necessity from home and, thereafter, started to be able to work up to three days from home because we’re developing that hybrid model.
We are trying to get — and again I use this expression — the best of both worlds. We have to make sure that public servants are delivering the best services to Canadians. Therefore, being able to work from home, up to three days a week, is something that we are at right now.
But at the negotiating table, I have to say that I kept a red line on making sure that it was still the right of management to make decisions on how the hybrid model will be pursued.
Where we made an interesting compromise is that we will be reviewing the telework directive which hasn’t been reviewed since 1993. That is what we have decided, with the union, with a letter of intent that is not part of the collective bargaining agreement, to have that review together. That will also give us an opportunity to better understand what is happening for workers, what their thoughts are, how the union believes that hybrid by design can contribute to delivering services to Canadians. That’s the first thing.
The second is a mechanism, again non-grievable, not part of the collective bargaining agreement but in the letter of intent, to give opportunities to have this mechanism for unions and managers to have conversations about the different preoccupations they may have about the hybrid model. It’s not just the question of working from home or working from the office. It’s the whole hybrid telework model. That will also give us a good case-by-case way to understand preoccupations. At the end of the day, though, that information will be taken by the manager, and then the decision will be made by the manager.
Therefore, I think we found a good place to make sure the union has participation but not being into the collective bargaining agreement per se.
Senator Smith: Do you have any numbers that you could provide to us in terms of how many people within PSAC are working at home versus the office? What’s the mix?
Ms. Fortier: It’s a very good question. At Treasury Board, from our directive, we don’t necessarily have all the numbers from all the departments. We are starting to gather some intelligence and data, but it is the department’s prerogative regarding how they will assess and determine the “up to three days” for their delivery.
Senator Smith: I asked because you hear that the numbers of public servants are growing, and when you look at numbers growing and the costs associated with the number of people within that particular group, you start to ask what types of efficiencies we are getting out of that group.
Ms. Fortier: That’s a good question.
That’s part of the transformation and delivery of our programs and services. Of course, we were affected deeply by the pandemic, like all organizations. As I said, at the beginning of the pandemic’s onset, we were working from home by necessity, and now we are able to create hybrid by design. That will continue.
We can also look at what other jurisdictions are doing. I know that we’re following other provinces, because we are aligned with them. If I am not mistaken, Alberta and Quebec are up to two or three days a week, and other provinces have been sharing with us.
I think we’ll have to look at how we best deliver services to Canadians and how we can bring the best of both worlds to that delivery of services.
Senator Smith: If Ms. Boudreau could send us numbers on how many people are being affected by this, that would be great.
Senator Pate: Thank you, Minister Fortier and all your officials, for being here.
When the Parliamentary Budget Officer was here, you heard some of the issues that were raised already in terms of the difficulty of properly auditing the Main Estimates when they come out before the budget. As you know, it was a recommendation of the 2019 House of Commons Standing Committee on Government Operations and Estimates, that when they release their findings, to have the Government of Canada reform its processes so that the cabinet and Treasury Board approval of budget measures are done in tandem in order for these measures to be included in the Main Estimates and to ensure the alignment of the budget and Main Estimates.
You mentioned there had been some experimentation by former Minister Brison. I’m curious as to what the specific reasons were, from your perspective, that some of those measures didn’t work. Also, what are you looking to do in order to improve those measures?
Linked to that, the Parliamentary Budget Officer also raised the fact that the targets and departmental results reports — one, the dates are not predictable and sometimes come out as long as eight months after. If that’s incorrect, I would be happy to get information that corrects it. But he mentioned that the targets and departmental results are largely determined by the public servants responsible for producing them, and sometimes, that means the measures, in his opinion, might be too low or they might not set the bar sufficiently high to be able to make a more transparent and fulsome assessment.
I’m curious as to what your response is to those concerns of the Parliamentary Budget Officer and whether you’re looking at amending any of those processes as well.
Ms. Fortier: Thank you for those thorough questions.
I also respect the Parliamentary Budget Officer in all of his work. I have to say, though, that it is sometimes difficult to keep track of Mr. Giroux’s position. In February, he said the targets were fairly easy to achieve most of the time, and then in his latest report, he was complaining that not enough were met. So it’s sometimes difficult to find.
The bottom line is that our government sets ambitious targets to improve Canadians’ quality of life, and we have been delivering. Also, we have been making sure that we are increasing opportunities to be transparent and accountable through the estimates process that we have currently. We also make sure that information is readily available as soon as possible.
I know the Main Estimates must be tabled on or before March 1. This year, we tabled on February 15, and then we tabled three weeks later, because there was a two-week “parliamentary pause,” I will say — because it’s not a break, believe me; it’s just a pause — and we tabled the departmental plans on March 9.
Therefore, we are really taking all of the opportunities to make sure we table on time and in — I don’t want to say quick — but in an efficient pattern.
Did you want to add regarding former Minister Brison’s approach?
Annie Boudreau, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you.
I will go back to the timeline between tabling the Main Estimates and tabling the departmental plans. As the minister said, there were 16 days between the two this year because of the two-week pause. Last year and the year before, it was one day in between, and the prior year, it was tabled at the same time.
That is just to confirm that we’re making the effort to be able to provide everything at the same time so you can have all the information in front of you in order to have a better understanding of the Government of Canada’s expenses.
To go back to your question about what did not work in 2017 and 2018, at that time, it was the perfect alignment between the federal budget and the Main Estimates. The Main Estimates were not tabled March 1 but on April 16 to give us the time to be able to account for the current budget expenses.
At that time, the amount was included under a central vote under the Treasury Board of Canada Secretariat. Every time a department would come to Treasury Board to get the approval to go with the implementation, the money will be released.
But parliamentarians thought that they were kind of losing a little bit of control in terms of the expenses, so the year after that — the second year — we decided to allocate the amount in individual plans for individual departments. Once again, it was perceived as a lack of control. That’s why it was decided to stop the project and revert back to the Main Estimates on March 1. We tried for two years.
Senator Boehm: Minister, welcome. I’ll join my colleagues in congratulating you in your role in getting a settlement with PSAC. My question is in that vein, following on from Senator Gignac and Senator Smith earlier.
With new agreements on remote work, I’m wondering about the impact on local businesses, especially in parts of urban areas in the country that had heavy traffic pre-pandemic from public servants. There is not a more concentrated area of Ottawa. Many businesses have relied upon proximity to federal buildings, the LRT and bus stations, and the presence of public servants. There was an uptick over the past two weeks in terms of foot traffic around this precinct, and businesses appreciated that.
But I’m raising this point specifically as an Ottawa-based senator to you as an Ottawa MP, and, as I keep reminding you, you are my MP.
I agree with the need for government to be flexible regarding reasonable remote work, and that is largely a positive development as we’ve learned from the pandemic, but it’s no secret that local businesses have suffered due to reduced foot traffic.
I’m wondering whether, through all of this, the government is contemplating a plan to help out small local businesses that are maybe struggling to stay afloat because of the entrenched remote work arrangements now. But also as you look into the future, it seems to me you could achieve some economies of scale in terms of real estate. There is a lot of governmental real estate around town, and perhaps this is where we could look at future housing options to deal with that crisis and other things. I’m wondering if you would take a venture in projecting what the next future might look like.
Ms. Fortier: Thank you very much, and as the Member of Parliament for Ottawa-Vanier, of course, we are challenged in the National Capital Region with the fact that there have been changes.
I have to say, though, that I’ve had conversations with many businesses, and the fact the up to three days working from home or up to three days working in the office has brought a little bit more life back downtown. That is helpful.
I have also been hearing from many businesses in Orléans and Kanata that their businesses have been thriving during the pandemic. We have to be mindful that other communities did benefit from the fact that public servants are working from home up to three days a week.
Nonetheless, it’s important to know that we have a footprint that is not as busy as it was, and we have many buildings that could be transformed. That is something that I actually said last year after Budget 2022, that we should be looking into real estate that we’re not using anymore and transform our communities and community living or even encourage ways to fulfill those buildings.
I also have the Greening Government Strategy as part of my portfolio, so I’m trying to find ways to renovate or make sure that our offices are net zero. If we’re not going to use them, maybe we can find ways to make them net zero and provide housing or community living.
Therefore, we are looking at how those creative solutions can be made. You’re right. We have to make sure we use those spaces. I’ve had many conversations not only as a member of Parliament but also as President of the Treasury Board with PSPC and others to try to find a way we can do this. With the mandate that I’ve had, we are looking into those types of solutions.
Senator Boehm: Thank you.
Ms. Fortier: I would like to compliment my colleague, Yasir Naqvi, the Member of Parliament for Ottawa Centre. He has also brought together a task force of businesses, stakeholders and different levels of government to try to look at how we can transform the downtown core, which is in Ottawa Centre. I think that will also give us an opportunity to hear from stakeholders and businesses about how we move now in transforming our communities. Across the nation, I’m sure that in other communities — I’m thinking of Halifax, for example, or even Vancouver — there is that kind of information that we can bring together and, depending on the model or models that we will use, make sure we use that space.
Senator Boehm: I would submit, minister, you might also look at jurisdictions outside of Canada. Many countries have gone through the same thing we’re going through.
Ms. Fortier: Very good idea.
[Translation]
Senator Galvez: Good evening. Thank you for being here to answer our questions, minister.
First, I want to commend you and your department for successfully negotiating an agreement with 120,000 public servants. I hope you will be just as successful when it comes to the 35,000 Canada Revenue Agency workers.
I have a general question and a specific question. My general question is about —
[English]
— greening the government and the economy. Given the urgent need to address climate change, do you believe that the Main Estimates adequately prioritize climate-related programs and initiatives? If not, what steps are the government taking to ensure these issues are being given sufficient attention and resources?
Ms. Fortier: I’m not sure I know how to answer your question, because the Main Estimates bring budgetary numbers on what is being asked to be spent. Therefore, I would challenge the fact that maybe we can have a conversation about my mandate of Greening Government Strategy, and that would encompass what the department is working on and with other departments across the government.
I think we have, as a government, shown that we are putting in all efforts for climate change and have been investing billions of dollars in getting to net zero. I know we’re trying to find examples, but my colleagues Minister Guilbeault and Minister Wilkinson have been working hard on critical mineral strategy. That is something that will help us address our strategy to get to net zero.
I would say that it’s maybe more on the ambitious goals and the investments that we’re doing, and maybe we can go into their different department expenses.
Senator Galvez: Maybe you can provide that in writing.
Ms. Fortier: Ms. Cahill tells me she might have another portion of information that could complement my answer.
Karen Cahill, Assistant Secretary and Chief Financial Officer, Treasury Board of Canada Secretariat: Actually, in TBS Main Estimates, we have $10.7 million in transfers from other government departments to the Greening Government Fund. This fund is to substantiate greening initiatives within different departments of the Government of Canada, for example, making the DND facilities greener in terms of their heating and the cooling systems. The building is redone to save on gas emissions.
That is only one example, but we are working with many government departments to enhance their facilities so that we are greener as a government.
Senator Galvez: Could you send that list of initiatives to the committee clerk?
Ms. Cahill: Yes. I would like to emphasize that this list of initiatives is provided on the greening government website, and we update it as we undertake other initiatives.
Senator Galvez: Thank you. My specific question is on vote 5, which provides Parliament with temporary advances for urgent or unforeseen expenditures in between parliamentary supply periods. You asked for the same amount last year, and I would like to know what the remaining funds are used for. If there are remaining funds, will they be transferred to another account? What do you plan to do? Is it related to COVID measures?
Ms. Boudreau: Thank you for the question. You are right that it is always the same amount. In fact, that amount has been there for the last 20 years. That amount has not been increased or decreased.
We use it, for example, when there is an urgent need for a department. Let’s say there is an announcement to give more money to Immigration. You saw the supply cycle that the president showed you earlier. If there is no supply cycle available for a department and they really need the money in order to make an urgent payment. They will use that money for the interim period, but they always need to reimburse that amount at the end of the cycle period. That amount is always going back to the fiscal framework after.
Once it is used by a department, you will see the details online. We always produce an online annex, and you will see the amount that has been used in that vote 5 and for which department.
Senator Galvez: When you say the department reimburses, what do you mean by that?
Ms. Boudreau: Let’s say there is something critical right now. The next period is Supplementary Estimates (A). Once we table Supplementary Estimates (A), they’re going to get the money. We’re going to take the money from them and pay back the vote 5. They will not get that money twice in their reference level.
[Translation]
The funds are advanced.
Senator Galvez: It’s an advance.
Ms. Boudreau: That’s right.
Senator Galvez: Thank you.
[English]
Senator Duncan: Thank you, minister and your staff, for being here with us today. I’m interested in following up on the strategic review undertaken by the government. I appreciate that in recent months the focus has been on negotiations, but could we just start with, as we’re dealing with Main Estimates, the strategic review? How much in terms of people and resources is dedicated to a strategic review of the government policies and programs?
Ms. Fortier: You want to know how much capacity we’re using inside Treasury Board to do this exercise?
Senator Duncan: Yes. What is devoted to this in terms of money and people?
Ms. Fortier: We don’t have any specific money allocated for doing this exercise. In the work that we’re doing as Treasury Board, we will be focusing on finding efficient ways to attain the amount that was asked for us. The measures that we need to get to is a saving of $15.4 billion over the next 5 years and then with ongoing savings of $4.5 billion.
Again, we have to remind ourselves that in Budget 2022, 50% of that was asked last year. So we’re working on the spending review, or refocusing our spending, making sure, as you know, with emergency pandemic spending that is winding down, we need to shift the funds to priorities like health care, the clean economy, and, as you know, reconciliation. We are now committed to reducing spending on outsourcing, travel and certain areas across departments on operations.
At the end of the day, it is about trying to be a smarter government, not a smaller government. That’s the objective. The team is working with all departments, making sure that we find those efficiencies to get to a total of $15.4 billion in the next 5 years.
Senator Duncan: If I understand you correctly, minister, what you’ve said is that it is not one individual assignment. Everybody is doing it off the corner of their desk.
Ms. Fortier: It is all part of how we are going to make sure that we go through refocusing our spending.
Senator Duncan: Minister, part of the strategic review is the effectiveness of programs and ensuring delivery of services to Canadians. Items such as picking the low-hanging fruit, say, “Let’s reduce the travel budget by 5%,” can reduce the awareness of public servants in Ottawa of everywhere else in the country. Travel is necessary for this great big country.
How, in asking for these savings, are you also ensuring the needs of Canadians are being met and the effectiveness of programs is being assessed?
Ms. Fortier: Part of the mandate that I’ve received is to also review programs and services offered by the government. Our first theme that we will be reviewing is any program that has skills. We’re going to be reviewing the skills across government programs to see if we can find ways to be more efficient. Perhaps some of the programs should now sunset. We will try to find some efficiencies in the skills programs that we have in the government. Afterwards, we’ll go with another theme.
At this time, it’s skills that we’re focusing on. That’s one exercise that we will be doing in the next year, and then we will find other themes to review.
Senator Duncan: Again, this is work within the whole department? There’s not one individual or one group that’s been assigned?
Ms. Fortier: It’s a whole-of-government approach. Everybody will have to work together. I know Ms. Boudreau will be the lead on this at Treasury Board, as we have already started to identify how we will reach out to departments to make sure that they do the exercise of reviewing spending in their departments with an approach that we are developing right now.
It would be an honour for me to come back and report on our efforts when we have started to see those efficiencies that we find.
Senator Duncan: Perhaps we could ask for the plan of how you’re approaching the departments as well. I’m particularly interested in how you’re measuring the effectiveness of programs across the country.
Senator Loffreda: Thank you, minister, for joining us. It’s always a pleasure to have you here. Congratulations on the settlement.
I’m glad Senator Duncan brought up the strategic policy review. When you last appeared before our committee on April 22, 2022 — we’re glad to have you back; it’s been a while; we missed you — you spoke about the government’s promise to conduct a strategic policy review in the hopes of finding $6 billion in savings by 2026-27. You did elaborate a bit on the strategic review. Maybe, if you wish, any further comments would be welcome.
Is there any work being done by Treasury Board to properly assess the efficiency of government services pre- and post-pandemic, anything in particular? You did discuss the review of the telework directive also, but any further comments on that pre- and post-pandemic when we look at the numbers of the public service and the services we are receiving?
I’ll elaborate a little more on that and give you some time to think about that answer.
We know the public service has increased in full-time equivalents in the past years. We also know that working at home is the new reality. In light of these major shifts, how can we evaluate the improvements in terms of service delivery to Canadians?
Don’t get me wrong, we have one of the best public services in the world, and Canadians are all grateful for their hard work. However, as I’ve often said, what we measure improves. As one economist recently put it, it’s all about outcomes, not about inputs. Has the increase in the public service generated better results and, if so, where? Are we improving outcomes? How are you measuring outcomes? We have seen major delay increases in many post-pandemic services, which we are all very aware of. How are you handling all that? Is there anything you’d like to share with us?
Ms. Fortier: That’s a very loaded question. Thank you very much. I will start by saying that during the pandemic, we had to really demonstrate leadership in making sure that we would support Canadians, workers and businesses go through the pandemic. We didn’t know how long it would last. Those supports were — the Canada Emergency Wage Subsidy, for example, the CERB — lifesavers for Canadians, businesses and workers.
Now that we have shifted to post-pandemic — and it’s been less than a year. I remember last year at this time, we were all wondering what was going to happen after. I believe it might be a bit too soon to have all of the answers to your questions.
I can tell you that departments are, every day, trying to find ways to be not only more creative but also making sure that they put all the efforts to deliver services to Canadians. Some programs we are not offering anymore, so shifting back to where the government wants to support Canadians, workers and businesses.
I would say that telework has been also something as we’ve been talking a lot in transformation and where we are at today. We will continue to look at how hybrid work can be part of the solution of the programs and services that we deliver.
For our productivity and service delivery, last year during the summer we all knew that it was very difficult, for example, delivering passports. We had a big backlog. It was difficult at airports. We also had difficulty with immigration and the different programs under IRCC.
I was part of the task force the Prime Minister brought forward and we worked very hard during the summer to try to assess how we reduce backlogs. At the same time, how do we best look at what we have to deliver those services. Therefore, what we learned from that exercise, I can say that apart from the pause we’ve had during labour disruptions, we’ve actually reduced the backlog of passports significantly. Before the strike, there were no longer backlogs. So we knew how to make sure that our programs are delivering and that we’ve reduced wait times significantly in airports and the backlogs in immigration programs.
Now, the strike will have affected many of our services that were not deemed essential during the 12 days that public servants were on strike, but I was happy to hear my colleagues, especially Minister Gould, saying the backlog will be reduced quickly because we have the capacity to deliver.
Therefore, I think we need to make sure that we balance and that we look at all of the data points that we are gathering on productivity, and look at if we still have the right programs? During our refocusing on our spending, we will be looking at how our programs are delivered and if we can find efficiencies.
I’m hopeful to continue on a path to make sure many of your questions will be answered. The contribution of departments is a whole-of-government approach. Yes, as the President of the Treasury Board I oversee operations, but I don’t necessarily dispose of all the solutions. The departments have the responsibility to do so.
[Translation]
Senator Shugart: Welcome to you and your team, minister.
[English]
I would like to continue that line of questioning, and I hope I don’t steal your thunder for round two.
We’ve seen a lot of attention recently on both the increase in outsourcing management consulting and so on over the last several years, as well as the growth of the public service. Much of the narrative has been that you have to go outside because you don’t have the capabilities inside. That narrative doesn’t always seem to withstand scrutiny.
I wonder if you have any further thoughts on that in regard to the government’s commitment to reduce by 15% the management consulting — I’m describing that broadly, I know that it’s more than just management — contracting and by 3% departmental expenditures.
It’s not so much the process that you’ll follow and the indicators which Senator Duncan raised, but do you have a view on where this is going to end up in terms of the public service and the balance between those two things?
We’ve been told that the highest external expenditures are engineering and architectural services. Those seem to me to be one-off kinds of expenditures as opposed to another high one which is the delivery of services in Indigenous communities, for example. How do you factor in for the estimate purposes where these expenditures are likely to be found or the reductions are likely to be found as between the internal and the outside capacity or, dare I suggest, are these just numbers that are somewhat arbitrary? Not that there’s anything wrong with that sometimes, but is there a pathway to get there?
Ms. Fortier: I will start and invite Ms. Boudreau to comment on the process part.
To start with that, the procurement of professional services is used to complement the work that Canada’s professional public servants or service do by meeting unexpected fluctuations in workload or even to acquire special expertise that we might not have. A strong federal public service is also the best way to deliver the programs and services that we have. With the fact that we’re developing a long-term government-wide public service skills strategy, including increasing the number of public servants with modern digital skills and improving external recruitment, we know that we have a major IT transformation in our government to support our different services. That will necessitate outsourcing, while at the same time making sure that the outsourcing needs don’t replace our public servants. We need to train towards the programs that will be transforming digitally, to give an example.
Therefore, now that the pandemic spending is winding down, we will be reducing our use of outsourcing by $7.1 billion — that’s for the next five years — and ongoing $1.7 billion. That’s our commitment. To do that, we will be doing the process that Ms. Boudreau is leading at this time.
Ms. Boudreau: Thank you very much. I would like to take a couple of minutes to demystify the professional services. Inside the amount that you have seen in the Main Estimates, there are 14 categories inside that amount. One of them — and I think you alluded to this — is health and services. Now we’re talking about nurses that Indigenous Services Canada needs in order to provide services to Indigenous communities. We need to be careful when we say 15%, because we need to do it very “de façon intelligente.” We cannot tax 15% all of those categories because we need those nurses, and we don’t have that capacity within the public service.
We keep talking about management consulting. Management consulting is only one out of the 14 categories. Even inside management consulting, we have financial management, transportation, economic development, environmental planning and public consultation. That amount last year’s public accounts was less than 5% of the total of professional services. We need to keep that in perspective.
Yes, we will be looking at each and every category, but we need to be very intelligent about where we apply that 15%? Like you said, if we talk about engineering and architectural, we can see there is a lot of capital funding as well. Again, we need to look specifically where the capital funding is going and just to make sure that we’re not taxing too much on organizations that need that money in order to provide services to Canadians.
In terms of the 3% that has also been included in the budget, we’re talking about discretionary spending. We are doing work as we speak with departments and organizations to establish the base. We don’t want to tax 3% on settlement payments to Indigenous communities; we cannot do that. Those are legal obligations for the Government of Canada, and that has to be removed from the base. So, again, we’re trying to be very methodical, based on the information that we have. We are working with all the departments involved to make sure that whatever is discretionary, we will be applying that roughly 3% on that base. Thank you.
[Translation]
Senator Dagenais: Good evening, minister. In response to a fellow senator’s question about the letter of understanding on remote work, you said that it wasn’t part of the collective agreement. I don’t doubt your word.
However, as a former union leader who has signed more than one agreement with the Quebec government, I have to tell you how surprised I am by what you said. A letter of understanding is usually an integral part of the collective agreement. It appears in appendices A, B or C. I’m not doubting your word, but I am quite surprised.
Ms. Fortier: I can give you a copy, if you like.
Senator Dagenais: I would appreciate that.
Ms. Fortier: The letter clearly states, in two places, that it is not part of the collective agreement. The letter is outside the agreement. To be fair, we signed the first letter of understanding in connection with the first agreement we signed, with the financial officers. That was the first agreement we signed with the Association of Canadian Financial Officers, back in November.
I can tell you that it was a successful undertaking. We found a creative way to ensure that the decision remains a management right. The telework directive will be reviewed, and we will work together on that.
Senator Dagenais: I don’t doubt your word. We have just six minutes, and I would like to discuss telework.
My understanding is that the decision would be made by the division director. They would decide how many days the employee was allowed to work from home. That probably comes as good news to lawyers, though, since I’m sure some employees won’t be happy with the decision and will file grievances. You know lawyers on both sides, management and the union, and adjudicators will be laughing all the way to the bank.
Did you do an estimate of the potential legal bill you could have on your hands? An employee who isn’t liked by their manager could be allowed to work from home fewer days than an employee the manager likes better. That’s going to lead to grievances and adjudication.
I spent five years in a union, and I know how much legal fees eat into a budget. Does your budget include an estimate of those legal fees and adjudication costs? Those expenses can really eat into an organization’s budget.
Ms. Fortier: My colleague Jean-François Fleury can give you more information, but it’s important to keep in mind that we are currently in transformation. During the pandemic, telework was a necessity, but once the pandemic ended, we had to come up with a hybrid work model by design.
We considered different scenarios, looking at what other jurisdictions in the country were doing, as well as the private sector. We then took a clear position on the matter, which I conveyed in December. The clerk made the final decision, whereby employees could work from home up to three days a week.
Nevertheless, departments are responsible for deciding how to proceed. At the Treasury Board, for instance, employees are required to come in up to three days a week. In other departments, employees can work from home up to two days a week. Departments have discretion over how to implement the directive.
I’m going to turn things over to Ms. Laroche or Mr. Fleury in a moment. First, I want to say that we just recently signed a letter of understanding, which I hope will be ratified. Keep in mind that we still have an agreement in principle. The purpose of the letter of understanding is to review the telework directive, which hasn’t been reviewed since 1993. That review will be carried out in conjunction with the union and management.
Ms. Laroche: Thank you for the question. My answer has to do with legal fees. First of all, even before this letter of agreement was signed, employees could file a grievance to appeal decisions. That right is not new. It existed previously.
Secondly, because this is a directive and not an article in the collective agreement, the final authority for a decision rests with the deputy head and not the Federal Public Sector Labour Relations and Employment Board. The case will not go to court, as the deputy head has the final say in decisions.
That said, as the minister indicated earlier, in the letter of agreement, a new mechanism is being introduced that will allow for a conversation within each department — on a case-by-case basis, if there’s ever a disagreement — with the goal of informing the decision-making process and gathering data for the review and to improve the processes.
Senator Dagenais: Do I have any time left?
The Chair: You have 15 seconds. I can add you to the list for the second round.
Senator Dagenais: I will use those 15 seconds to thank you for your responses.
The Chair: Minister, you’ve been very generous with your time.
[English]
But I have a question that I would like to pose, and this question is about the Phoenix pay system. This is a report we made in July of 2018.
[Translation]
In New Brunswick, people tell me that they’re still having problems with the Phoenix pay system. The Canadian government’s road map tells us that Phoenix, when it began, resulted in 384,000 financial transactions — which I consider payroll problems.
By March 2021, the 384,000 figure had dropped to 94,000. In March 2023, the figure rose again to 203,000 transactions or problems.
Minister, could you provide an update on the Phoenix payroll system replacement? Where does the problem lie?
Ms. Fortier: I will begin to answer, and I’m sure my colleagues can further clarify. Senator, you will understand that I have to leave shortly, as I have another commitment after this one.
First of all, as you know, all public servants deserve to be paid properly for their work. The Government of Canada continues to take action on all fronts to address pay issues.
As you said, the Phoenix payroll system continues to produce surprises. You call these transactions problems; I call them surprises. We are currently devoting all our energy to finding a way to reduce these problems. We’ve also realized that many of these situations must be addressed on a case-by-case basis to find solutions.
I’m sure you understand that we’re well aware of the situation and keen to find a solution. We’re currently working on the stability of the Phoenix payroll system, with what is called ProGen. We’re in the exploratory phase.
We’ve been working with different departments. I won’t name them, because I’ll get it wrong, but there are three of them. We’re trying to find ways for the next payroll system to address all of the complexity of Canada’s payroll system.
One of the things we’re trying to do is simplify the complexity we’re dealing with. We’re working very hard to try to simplify payroll. As the largest employer in the country, you can imagine how many categories we have to take into account.
There’s no private company that can provide us with a product and say, “take this for your payroll system.” It must be designed to accommodate our complexity. We’re working with outside vendors to help us prepare for this next payroll system. We’re in the exploratory phase.
You might want to invite Minister Jaczek to provide a better overview of the Phoenix system, which is helping to prepare for the new one that will be rolled out. The digital aspect takes time to develop. I wish I could tell you that we can expect a new solution within a year and that it will eliminate all the problems. Unfortunately, I simply can’t do that.
However, we’re devoting all of our energy into simplifying everything, while still maintaining a payroll system that will support public servants and pay them appropriately. I don’t know whether anyone has anything else to add.
Jean-François Fleury, Assistant Deputy Minister, Planning, Research and Renewal, Treasury Board of Canada Secretariat: Good evening, I’m Jean-François Fleury, Assistant Deputy Minister of Treasury Board of Canada Secretariat’s strategic planning.
Treasury Board has two roles on the payroll front: the first is to work with Public Services and Procurement Canada to simplify and stabilize the Phoenix system and, in parallel, with Shared Services Canada, which, as the minister mentioned, is testing solutions that could replace the Phoenix payroll system, as well as the human resource systems that contribute to the overall payroll environment.
A recommendation should be coming from Shared Services Canada this fall as to the viability of the testing they’ve been doing, in terms of whether to use a new solution and in what phase. The timing will be exceedingly important, as we know that change management has had its failures, in the early experience, so we’re working on both aspects.
[English]
The Chair: Madam minister, on behalf of the committee, I want to take this opportunity to say thank you very much. You have been very generous. We’ll take the second round with your officials.
[Translation]
Ms. Fortier: Thank you for your questions. My door is open. It doesn’t have to be around a committee table; if you have further questions, come and see me. I’d be happy to have a conversation about my mandate as President of the Treasury Board of Canada.
The Chair: Honourable senators, we will now proceed to the second round. I will begin with Senator Marshall, who has three minutes, as each of you do.
[English]
Senator Marshall: The $13 billion for the Volkswagen deal, is there any money in the Main Estimates or the fiscal framework for that? If yes, where would I find it?
Rod Greenough, Executive Director, Expenditure Strategies and Estimates, Treasury Board of Canada Secretariat: The deal came after the Main Estimates, so it’s not in the Main Estimates. That part we can answer. As far as the fiscal framework, it will be a Finance question as to whether it was included in the budget or the fiscal framework.
Senator Marshall: Okay. Thank you. [Technical difficulties] We had to wait a while for a couple of organizations to get the data. What’s the issue with regard to getting that data? It really held us up in our review. That’s one question on departmental results.
The other one is relating to your own departmental results. Your own results are worse than the government average. I think the government average for having met performance indicators is like 49 point something per cent, and I think you’re down at 46 or 45, so you’re not even at the average. I would see you as being leaders in your field. Those are the two questions on the Departmental Results Reports. What’s the problem with the data and what’s the problem with your own results? Thank you.
Ms. Boudreau: Thank you for your question. I will address the first question, and my colleague will go with the second one. You are correct, it was CRA and PCO, and you asked me the question when I came last time.
Senator Marshall: Yes. And you got the data?
Ms. Boudreau: I got the data, but that’s a question for CRA and PCO why they were not able to provide the data at the same time as the other departments. But we made sure it was posted after we came here.
Senator Marshall: Yes, you did. Thank you very much. What about your own results?
Ms. Cahill: This is a very good question. It’s a better result than the year before, so we improved. We had a target of 100%. Everyone has expectations to meet the best, everything. In this case, the results you’re looking at seem to be in good asset and financial management practices. So if I relate to 46%, because our Departmental Results Report has many results, and we report our results by the different line, so this would be under administrative leadership.
We are continuously improving. That’s the good news. I’m not sure where the Government of Canada result you’re referring to is.
Senator Marshall: I think it’s 49.8%. We take all of the data for all of the organizations.
Ms. Cahill: I don’t have this information.
Senator Marshall: Well, you’re below average.
Ms. Cahill: Yes.
Senator Marshall: I would have expected you to be above average.
Ms. Cahill: Yes, definitely so. We’re doing our very best to ensure we’re above average. We lead by example. Definitely, we’re aiming to improve this result next fiscal year.
Senator Marshall: I will look next year and see where you are at.
[Translation]
Senator Gignac: Welcome to the members of the Treasury Board Secretariat. I would like to welcome Ms. Boudreau, whom we always enjoy having here at the committee.
To follow up on the question I asked the minister, I’m wondering about the size of government. In 2015, there were 257,000 public servants in Ottawa in the federal government. By 2022, that number had risen to 336,000 employees, a 30% increase.
The population grew by 10% during that period, but the number of public service employees has grown by 30%. Over the past four years, in Quebec, the number of public service employees has increased by 11%; at the federal level, it has increased by 22%.
You have an important role at Treasury Board. We rely on you and your expertise. Will the size of the federal apparatus continue to grow faster than the Canadian population? Is Treasury Board looking into that?
Ms. Boudreau: Thank you for the question. If you look at the growth in spending over the last few years, and compare the estimates from four years ago with this year’s, there is a significant increase of about 40%.
This increase is marked by statutory spending of about $60 billion and also by voted expenditures of $69 billion. Indeed, as new programs are created, more spending is put forward to support Canadians. We need a public service that grows.
I can’t draw comparisons with Quebec because I don’t have all the information. However, I can say that the growth of the public service follows, to some extent, the growth in spending that you see today.
Senator Gignac: I think all federal employees work hard. I don’t want my comments to be misconstrued, but I’m trying to draw a comparison with the private sector, where you often have productivity measures like dollars of sales per employee. I’m trying to find out whether there is such a measure at the federal level.
As I understand it, the number of federal employees has kept pace with the increase in the number of programs and the size of government.
Ms. Boudreau: If you go into the details, you will certainly see a greater increase. For example, at the Canada Revenue Agency, the increase is due to COVID-19, because of payments that were made under the emergency support programs.
We’re also seeing an increase at Employment and Social Development Canada. A growing number of new programs were given to the department. For example, in the daycare file, the funds were voted and distributed recently. We’re also seeing an increase at the Public Health Agency, which is somewhat related to COVID-19 as well.
We had to implement many programs to support Canadians during the COVID-19 pandemic. It may be appropriate to look at where the growth is coming from on a case-by-case basis.
[English]
Senator Smith: I have a question for Ms. Boudreau.
One of the topics I have been following is the idea that the federal government will develop a comprehensive human resource plan that would be tied to the long-term spending plan.
I know what you have been through with COVID. I’m not sure whether you have had a chance to look at it, or if it is in discussion, but the plan would provide not only greater transparency about hiring practices of the federal government but provide better and more predictable information about how the departments will be working to meet various objectives of the government.
Have you had a chance to think about or develop a formal human resource plan which would be tied to your long-term spending so that you would have the ability to really measure the effectiveness of your workforce? I think it’s a logical question and it follows part of what Senators Shugart, Gignac and Loffreda were looking at.
Do you understand what I am asking?
Ms. Boudreau: I do understand what you are asking. It was also discussed during a PBO appearance not long ago at this committee.
I’m not aware of any plan for the Government of Canada as a whole.
What I can say is that department by department, the deputy head, the accounting officer, will have a good understanding of what the needs are in terms of full-time equivalents, or FTEs, number of employees, complemented by professional services in order to be able to deliver on their programs. Again, in terms of the Government of Canada as a whole, I do not have that information.
Senator Smith: You’re like the Treasury Board for the people that you oversee under your authority. Would there be a human resource plan, or is it something that you have had a chance to talk about?
I understand department-by-department. But there can be confusion with department-by-department, because how do you measure one department against the other as part of your overall performance reviews?
Mr. Fleury: Thank you for the question. It’s a good one. The employer, when there are horizontal issues, definitely plays a role, such as our colleagues in the Office of the Chief Information Officer of Canada, or OCIO, and looking at the digital skills strategy, the digital ambition, et cetera.
The way that human resources are governed in the public service, it’s a delegated authority to deputy heads. The deputy helps look at their programs and what’s expected of them. They align their resources accordingly. The plan for each department has commonalities across the system but is very specific to the environment, the operations and the actual services that the department needs to deliver.
Senator Smith: If there is anything you can send us in writing, we would appreciate it so we have more information.
Mr. Fleury: Okay.
Senator Loffreda: If I look at the operating budget carry-forward line, Treasury Board Secretariat is requesting $3 billion for vote 25, the operating budget carry forward. This is an increase of 43% compared to the same item last year, a $900 million increase.
Can you explain the purpose and function of vote 25 or the carry forward in the budget and how it relates to the operating budget? Why is there a 43% increase? What are the reasons behind that increase? How do you plan to monitor the usage of that increase and those funds in order to give the taxpayers full use of their resources and money?
Ms. Boudreau: Thank you for the question.
In fact, the operating budget carry forward has been put into place since a long time ago. In fact, it was a recommendation from the OHA. At the end of the year, March 31, when there is still money available in a department budget, in order to be able to keep some of that money to be able to pay for expenses that have been delayed, we give departments the authority to carry forward up to 5% of their operating budget.
Why you see an increase this year is because it is based on previous years Main Estimates. If your Main Estimates have increased, obviously that amount is still the 5% but the base is bigger, so you see an increase.
Every time that this specific vote is used by a department, you will see an online annex that will give the detail of each department that has requested a carry forward. You will also see the amount. We report on that every year.
Senator Loffreda: And how would you monitor its usage? It’s based on departmental results?
Ms. Boudreau: It is based on needs, basically. It was put into place to avoid wasting money; departments wanted to waste money on March 31. We wanted to make sure that money would be available the year after, so to be intelligent about spending that money. So that’s really the goal of it, and we’re calling that “March madness.” It was to avoid “March madness.”
Senator Loffreda: It’s never cut, right? You never cut it, because if they know you’re going to cut it, they’re going to spend it.
Ms. Boudreau: Yes. Now they have the flexibility —
Senator Loffreda: So they don’t spend it; they carry it forward. So the increase is a good sign.
Ms. Boudreau: Absolutely. It is up to 5%. Some departments will request less than 5% but it is up to that.
Senator Loffreda: But it’s a positive, up to 5%. I get that. Thank you.
[Translation]
Senator Dagenais: Thank you, Ms. Boudreau. You mentioned the decrease in spending on outside resources that had been announced. My understanding was — I don’t know whether it was an order — that you may not have been confident that you could achieve the savings you wanted.
With the millions of dollars that have been given to a certain consulting firm, namely McKinsey, are you able to assure us that these savings will be achieved in the current fiscal year? Owing to the outside contracts, I can tell you that it can be quite difficult to track.
Ms. Boudreau: Thank you for the question. My answer earlier was to explain that these savings must be achieved intelligently. That was the point I wanted to make.
If you look at the federal budget — page 192 in the English version and page 215 in the French version — you’ll see that, for the current year, 2023-24, professional services will have to be cut by $500 million. That’s what we see for the current year. The amount will increase the following year, 2024-25, to $1.6 billion.
We are currently working with departments to identify discretionary spending where the 15% announced in the federal budget could be applied.
Senator Dagenais: I wish you good luck.
Ms. Boudreau: Thank you.
[English]
Senator Duncan: I would just like to follow up on some of the comments and responses that have been made about program reviews, strategic reviews and finding efficiencies within departments.
I’m concerned that there have been lots of discussions about people, HR and outsourcing, and we haven’t had as much discussion about the programs and the effectiveness of programs. You did mention that departments were asked to find 3%.
In the budget documents we have, we see some marked differences between the number of expenditures and estimates in some programs that affect all Canadians. For example, my colleague asked about grants under museum assistance and other grants. We’re seeing quite a difference in amounts. That is of concern to Canadians.
How is your look and your request for money ensuring that there is not just a whole-of-government but a whole-of-Canada approach and that there is an assessment of the effectiveness of programs to ensure they’re meeting the needs of Canadians?
Ms. Boudreau: Thank you for the question.
We’re still at the planning stage of the review that was announced in Budget 2023, but we are putting together criteria we want to use in order to guide departments and agencies to do that review. One of the criteria that we want to use is making sure that departments are talking to each other. Sometimes, maybe a cut in one program can also have an impact on another, so we want to make sure that we take the horizontal approach, as you said. That’s one element.
Another criterion that we’re going to put forward is looking at the quality of life. If we decide to cut or reduce a program, what will be the impact on the quality of life framework that we know? It is the same about GBA+ and Indigenous procurement.
We’re putting all the criteria out there and trying to have something to make sense to provide to departments to come back to us with their best proposals in order to be able to assess that reduction of up to 3%.
Senator Duncan: If I might, is there any room for Canadians to provide you with advice on that?
Ms. Boudreau: I’ll take that question back, and we will come back to you on that.
Senator Duncan: Thank you.
Senator Pate: Thank you to all of you again for being here.
I wanted to pick up and allow a greater expansion, perhaps, on something. If time doesn’t allow tonight, perhaps you could send it in writing. In the 2019 House of Commons report entitled Improving Transparency and Parliamentary Oversight of the Government’s Spending Plans, some of the recommendations they made about the role the Treasury Board could play I found to be very interesting and compellingly. The ones I would be very interested in what progress you’ve seen are working together on — I’ll just list them, if that’s probably easier: recommendations 4, 10, 11 and 12.
We probably don’t have time to go through them — but the opportunity to work on those issues with all departments as a way to allow Treasury Board to have a better idea of what’s happening — more fulsome — and also to allow parliamentarians to have as well.
Ms. Boudreau: It would be difficult for me to comment, because I can’t associate any of the observations or recommendations to those numbers. My apologies.
Senator Pate: Okay. I’ll read them into the record, perhaps.
Recommendation 4:
That the Treasury Board Secretariat work with departments and agencies to ensure that details of new spending presented in the main and supplementary estimates appear in their departmental plans as soon as possible.
Recommendation 10:
That, in accordance with the federal government’s Policy on Results, the Treasury Board Secretariat ensure that departments and agencies include related program objectives and purposes, and projected measures of performance in their departmental plans.
Recommendation 11:
That the Treasury Board Secretariat work with departments and agencies to develop standard metrics for measuring program performance and developing performance indicators.
Recommendation 12:
That the Treasury Board Secretariat reinforce its Policy on Results by strongly encouraging departments and agencies to minimize the use of “to be decided” or “not applicable” in their departmental plans under the key results expectations and the explanations of performance indicators.
Ms. Boudreau: Maybe I’ll take two out of the four if we have time and come back in writing with the other two.
The first one was about tabling the Departmental Plans, or DPs, and Departmental Results Reports, or DRRs. We discussed that with the president when I gave you the number of days between Main Estimates and the DPs. So I think that one is covered.
Senator Pate: Sorry, is that clear for every department — that you’re getting them within one day last year?
Ms. Boudreau: Yes. So once the president tables the DPs or the DRRs, she tables all of them at the same time for the Government of Canada.
Senator Pate: Okay. Great.
Ms. Boudreau: In terms of the recommendation 12, policy on results, I think I have addressed that previously at committee. We’re doing a review of the policy on results. It has been five years; it’s time for a review. We are engaging stakeholders, and we have engaged the Deputy Minister as the client of that policy. We’re doing a lost engagement with people working and providing those indicators. We would be more than happy, when we are at a point where we can share our findings, to come back and share those findings with you.
Senator Pate: Sounds great. Thank you.
The Chair: Thank you, honourable senators.
Before we do adjourn, I have a few comments that I’d like to share with the senators and witnesses.
[Translation]
Ms. Boudreau, if you could send us your written responses, we’d be grateful. We need them by May 17, 2023.
On behalf of the committee, thank you for your professionalism and for the information you shared with us this evening.
[English]
Our next meeting will be Tuesday, May 9, at 9 a.m. where we will immediately start the examination of Bill C-46, which was sent to this committee this afternoon by the Senate of Canada. On this, honourable senators, I now declare the meeting adjourned.
(The committee adjourned.)