THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, November 28, 2023
The Standing Senate Committee on National Finance met with videoconference this day at 3:01 p.m. [ET] to study Supplementary Estimates (B) for the fiscal year ending March 31, 2024.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators, I wish to welcome you and all the viewers across the country who are watching us on sencanada.ca.
[Translation]
My name is Percy Mockler. I am a senator from New Brunswick, and chair of the Standing Senate Committee on National Finance. I would now like to ask my colleagues to introduce themselves, starting from my left.
Senator Forest: Welcome, ladies. My name is Éric Forest and I’m an independent senator for the Gulf senatorial division.
Senator Gignac: Good afternoon. Clément Gignac, senator from Quebec.
[English]
Senator MacAdam: Jane MacAdam, Prince Edward Island.
[Translation]
Senator Galvez: Rosa Galvez, independent senator from Bedford, Quebec.
Senator Loffreda: Good afternoon and welcome. Senator Tony Loffreda from Montreal, Quebec.
Senator Smith: Good afternoon. Larry Smith from Montreal, Quebec.
[English]
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Dagenais: Jean-Guy Dagenais, Victoria division, from Montreal, Quebec.
[English]
The Chair: Today, we resume our study on the expenditures set out in Supplementary Estimates (B) for the fiscal year ending March 31, 2024, which was referred to this committee on November 21, 2023, by the Senate of Canada.
[Translation]
We have the pleasure of welcoming senior officials from the Treasury Board of Canada Secretariat and the Department of Finance.
From the Treasury Board of Canada Secretariat, we have Ms. Annie Boudreau. Thank you, Ms. Boudreau, for accepting our invitation. From Finance Canada, we have Ms. Véronique Beaumier-Robert.
[English]
Welcome and thank you for accepting our invitation. Immediately, I will ask Ms. Boudreau to give her comments, to be followed by Ms. Beaumier-Robert.
[Translation]
Ms. Boudreau, the floor is yours.
[English]
Annie Boudreau, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you, Mr. Chair.
First, I would like to acknowledge that the territory on which we are gathered is the unceded traditional territory of the Algonquin Anishinaabe people. I would like to thank the committee for inviting me today to discuss the 2023-24 Supplementary Estimates. I’m joined by Karen Cahill, Assistant Secretary and Chief Financial Officer; Samantha Tattersall, Assistant Comptroller General, Acquired Services and Assets Sector; Marie-Chantal Girard, Senior Assistant Deputy Minister, Employee Relations and Total Compensation; Leonard Bastien, Senior Assistant Deputy Minister Office of the Chief Information Officer; and Jacinthe Laporte, Senior Director, Expenditure Management Sector.
Mr. Chair, these supplementary estimates present a total of $24.6 billion in incremental budgetary spending. Of this amount, $3.9 billion is an increase in forecast statutory expenditures, meaning it’s already authorized through existing legislation.
With the balance of these Supplementary Estimates (B), the government seeks authority for $20.7 billion in additional voted spending. These new budgetary spending plans will ensure the government continues to deliver on its commitment to Canadians in several important areas. These include significant investments in the implementation of settlement agreements and related compensation for Indigenous peoples, military aid to Ukraine, and compensation and benefits for the federal public service and the Canadian Armed Forces.
[Translation]
The Supplementary Estimates (B), 2023-24 include three items over $1 billion: $5 billion for the Restoule settlement agreement, under the Department of Crown—Indigenous Relations and Northern Affairs Canada; $2.1 billion under the Treasury Board Secretariat to fund recently negotiated collective bargaining agreements for 215,700 public servants and other related adjustments to employment conditions; $1.6 billion for the Department of Crown—Indigenous Relations and Northern Affairs Canada and Parks Canada Agency to settle land-related claims and litigation.
There are also three items over $500 million for the Department of Crown—Indigenous Relations and Northern Affairs Canada, including $651 million to fund the Federal Indian Day Schools Settlement Agreement; $596 million for the Specific Claims Settlement Fund; $593 million in funding for compensation related to losses incurred through the diminishing purchasing power of annuity payments with Treaty 8 First Nations.
I’d also like to mention two items of $500 million or more for the Department of National Defence, just under $584 million for compensation and benefits for the Canadian Armed Forces and $500 million for military aid to Ukraine.
[English]
In keeping with the government’s commitment to transparency, I would note that additional details and context beyond what is contained in the table documents are also available online. Reporting tools, such as GC InfoBase and the Open Government Portal, allow users to easily see the authorities approved by Parliament and indicate how public funds are being invested.
Budget 2023 announced that the government will identify $15.4 billion in government spending over five years to be refocused to support Canadians pressing needs, such as health care, dental care and the future of the economy.
As these estimates detail, we have already reduced travel and professional services spending by $500 million this year. Reductions for 2024-25 and beyond will be included in the Main Estimates, which will be tabled by March 1. In addition, saving proposals are being carefully assessed to ensure they are sustainable and do not create future funding pressure.
I will now be happy to take any questions committee members may have.
[Translation]
Thank you very much for your attention.
The Chair: Thank you. Ms. Beaumier-Robert, the floor is yours.
[English]
Véronique Beaumier-Robert, Deputy Chief Financial Officer, Department of Finance Canada: Good afternoon, Mr. Chair and members of the committee. Thank you for the opportunity to present the 2023-24 Supplementary Estimates (B) on behalf of the Department of Finance Canada.
I would also like to acknowledge that I’m speaking to you from the traditional unceded territory of the Anishinaabe Algonquin people. Joining me are other departmental officials to assist me in providing a more in-depth perspective on the rationales and policies supporting the numbers within these estimates.
As you know, the department supports the Deputy Prime Minister and Minister of Finance by developing policies and providing advice to government with the goal of creating a healthy and resilient economy for all Canadians.
The 2023-24 Supplementary Estimates (B) reflect a departmental budgetary increase of $2.2 billion, stemming from a $3.4 million increase in vote 1, program expenditures, and a $2.2 billion increase in statutory spending. Given these increases, the department’s total proposed budgetary authorities to date are $132.2 billion.
The increase of $3.4 million in vote 1, program expenditures, relates primarily to funding for the financial sector legislative review and a combination of reprofiles and transfers to other government departments.
[Translation]
Statutory expenditures are not included in the appropriation bill, as they have already been approved by Parliament through enabling legislation; however, they are included in the estimates documents for information.
The statutory expenditures reflect a net increase of $2.2 billion which are mainly for payments to provinces and territories. Payments of $2 billion through a top-up to the Canada Health Transfer will help provinces and territories address immediate pressures on the health care system, especially in pediatric hospitals and emergency rooms, and long wait times for surgeries. The federal government also provided for the $156.9‑million payment to the Province of Newfoundland as part of the Hibernia Dividend Backed Annuity Agreement. The payment is based on projected free cash flows of the Canada Hibernia Holding Corporation, a Crown corporation that administers Canada’s working interest in the Hibernia oil project, over the remaining life of the project.
Mr. Chair, this concludes my overview of these Supplementary Estimates (B) for the Department of Finance.
My colleagues and I would be pleased to answer any questions the committee members may have.
The Chair: Thank you.
[English]
Honourable senators, for the first round, I will recognize Senator Marshall.
Senator Marshall: Thank you for being here today. Ms. Boudreau, you were mentioning in your opening remarks about the different settlement agreements in Crown-Indigenous Relations, and it’s very difficult, when you look at the estimates document, to find exactly what set of financial statements these numbers are reflected in. The Restoule settlement agreement, the $5 billion, is in this year’s estimates. Is it in last year’s financial statements?
Ms. Boudreau: That’s a very good question. We don’t have anybody today to talk about Public Accounts, but Mr. Chair, we can come back to you with a written answer to that specific question, and you will give us the deadline for coming back to you with those answers.
Senator Marshall: I was looking for the $5 billion. I think the Gottfriedson Band class settlement agreement, that was in Main Estimates — got charged back to last year, and the other ones, land-related claims, $1.5 billion, the day school settlement, and when you look at the Public Accounts, there’s a very strange explanation given. It says that in 2023 — that means last year’s financial statements — $26 billion related to Indigenous claims as recorded in expenses last year, and that if those expenses hadn’t been claimed last year, the deficit would have been lower. It would have been $9 billion.
What is in that $26 billion? Is the $1.5 billion in there? I’m trying to match up the cash document with the accrual document because the two don’t align, so I would very much appreciate it if you could do that.
It would also be appreciated if you could list, not just relating to Indigenous claims but all cash items in Supplementary Estimates (B) that have been charged back to the 2022-23 Public Accounts. I would be interested in seeing that. I’m just looking now through my notes to see what else is there. If we can get that information of the match of the Public Accounts and the estimates, that would be very much appreciated.
My next question is on the reconciliation. It’s called Comparison of Budget 2023 and Estimates to date, 2023-24, and it’s on pages 1 to 4 of the Supplementary Estimates document. I’m just wondering what is in that accrual figure of $61.4 billion, if I could have a listing of that?
I’m looking at the logic of the reconciliation, because I rely on it a lot. We’re into Supplementary Estimates (B), but there’s no provision there in the reconciliation for Supplementary Estimates (C). I don’t know if it’s been rolled into the accrual of the $61.4 billion, but I would also appreciate some clarification on that.
When the Parliamentary Budget Officer was here last week, and also in his report on Supplementary Estimates (B), he said that $10 billion of Budget 2023 initiatives have already been brought into supplementary estimates, and he said that was 60%, so he said there’s 40% left. That means there’s about $6 billion or $7 billion left to be brought in.
Do you have detailed information on what that $6 billion or $7 billion is?
Ms. Boudreau: We do have the details, but I want to comment on something. The PBO report includes all new funding, voted and statutory. What you’re going to see here are only the voted, so there is a discrepancy in the two methodologies that are being used as we speak. But we can provide you what has been included and what is still up for the next run of estimates. But I wanted to make the comment that we’re not using the same methodology.
Senator Marshall: That’s a good point, because my numbers don’t match his, so that’s why I’m asking you for your numbers. Thank you.
The savings of $350 million in professional services allocated to the various departments, is there a logic to that? Was it on a prorated basis, or was it more arbitrary than that?
Ms. Boudreau: There is a logic.
Senator Marshall: There’s a logic.
Ms. Boudreau: There is a logic for sure. I will state what was included in Budget 2023.
In terms of professional services and travel, it was indicated up to 15% of discretionary spending. That’s what was included in Budget 2023. For the operating and grants and contributions, it was up to 3%. We use those numbers in order to be able to do the allocation up to the $350 million that you just mentioned for professional services.
In terms of travel, we have also travel, to arrive at the $500 million. For the travel methodology, we use the average of spending and travel pre-COVID, and after COVID, and we applied that methodology to all departments and agencies part of this review.
[Translation]
Senator Forest: Thank you for being with us today.
My first question concerns the Phoenix pay system. There’s a request for $23.1 million in authorities for a settlement relating to the Phoenix pay system. The number of financial transactions beyond the Pay Centre’s normal workload increased from 94,000 in March 2021— and I hope this won’t make you run away — to 241,000 in October 2023.
My first question is this: what is the nature of the Phoenix settlement?
Now for my second question: what explains the increase in the backlog of financial transactions?
Karen Cahill, Assistant Secretary and Chief Financial Officer, Treasury Board of Canada Secretariat: Thank you very much.
The $23.1-million agreement concerns the settlement of a class action for damages suffered by certain employees impacted by the Phoenix pay system. Once the court ratifies the agreement, we’ll make the appropriate payments to those employees. Specifically, the agreement has to be ratified by a Quebec court judge. It’s known as the Bouchard agreement or the Bouchard class action, for employees who weren’t full time, such as students, seasonal and term employees, hired for terms of less than four months.
That’s the authorization for funding that you can see in the Supplementary Estimates (B).
Senator Forest: Is it only for part-time employees, students, et cetera? In other words, are there other class actions hanging over our heads?
Ms. Cahill: At this time, we aren’t aware of any other class actions, with one exception, but I’ll let my colleague Ms. Girard respond.
Marie-Chantal Girard, Senior Assistant Deputy Minister, Employee Relations and Total Compensation: Thank you for the question, senator.
We’re in ongoing discussions with the bargaining agents. The agreements ended in 2021. Since then, some employees continue to be affected. However, the major impacts haven’t been proven. We’re continuing to analyze the situation to properly quantify the types of consequences that employees may experience due to system flaws.
Indeed, the principle that our colleagues at Public Services and Procurement Canada put in place — meaning to not let new errors become old files — ensures that they’re faster at processing and reconciling pay files than in previous years. Therefore, inevitably, the number of individuals experiencing major impacts continues to drop.
Senator Forest: Is that true, even though the backlog increased from 94,000 to 242,000? I was appointed to the Senate seven years ago, and Phoenix was the first topic we discussed. It’s quite concerning to see the problem still being discussed seven years later.
Ms. Girard: It’s true that the problems haven’t been completely resolved. Indeed, I can mention that, under the deal to renew the collective agreements from the 2021-22 round, we have collective agreement implementation schedules, which respect normal employee payment schedules. This means that we’ve returned to a collective agreement implementation schedule that’s similar to the one in place prior to the issues caused by the Phoenix pay system.
Senator Forest: The other system that was changed and that concerns me is the insurance system, with the change to Canada Life.
You’re asking for an authorization for $359 million under vote 20b for the Public Service Health Care Plan. Indeed, everything changed on July 1, with Canada Life, as was mentioned. The service centre received a very high number of calls and many problems were reported in the media.
Why is an additional amount of $359 million being budgeted? I’m curious; what was the reason for changing the health insurance plan administrator?
Ms. Girard: Thank you for the question, senator. I’m going to respond to the first part and let my colleagues comment on the amount billed this year.
The benefit plans, be it for health care, dental care or disability, are granted, delivered and administered by the insurers. Treasury Board identified this as a good practice, and it’s good practice in the industry to regularly readjust contracts to ensure that the administration remains up to date, and that new management systems and approaches are used in government contracts.
Sun Life was the health care plan administrator for 27 years. When Treasury Board of Canada created a renewal calendar for all the plans, this was the largest plan. It’s the biggest private health care plan by any employer in Canada. This regime was put in the pole position and was readjudicated first.
It’s essential to separate the “plan” from the “administrative contract.” The amount being allocated falls under the “contract,” if I’m not mistaken.
Ms. Cahill: I’ll add to my colleague’s response —
Senator Forest: Or perhaps my question as well—
Ms. Cahill: No, I’ll add to what my colleague said.
The amount set out in the Supplementary Estimates (B) under Treasury Board Secretariat is essentially being requested because the secretariat, as employer, is responsible for the Public Service Health Care Plan.
This amount completes and augments the plan to ensure that our contingency fund is sufficient to respond to claims we’ll receive throughout the year. The increase is essentially due to two factors: the increase in services and in service costs, as well as the cost of products, such as medication, medical assistance and everything else, and it is also due to the increased number of employees in the public service. It’s only an increase in price and volume, so to speak, which means that additional funds needed to be requested under vote 20, for the Public Service Health Care Plan.
Ms. Girard: The last reason is also interest rate increases, which had an impact on the plan.
Senator Gignac: Welcome, ladies. My first question is for Ms. Boudreau and concerns Treasury Board.
Additional funding is being requested for a Greening Government Fund. I’d like you to tell me about the size of the fund and its governance structure.
Recently, another green fund with a different name, the Sustainable Development Technology Canada fund, made the news. These are major amounts. We saw there were conflicts of interest, reports were published, and Minister Champagne said that perhaps the fund’s governance should be reviewed. How does the fund work and how big is it? Is there an independent committee analyzing the projects?
Could you tell us a bit about it, to reassure us that there aren’t any governance problems as with the other fund?
Ms. Boudreau: Thank you for the question, senator. I’m going to give the floor to my colleague, the Chief Financial Officer at Treasury Board Canada Secretariat, so she can give you additional information.
Ms. Cahill: Thank you very much.
The $900,000 amount under the fund was carried over from the previous year. The fund had a surplus last year, and we asked that the $900,000 be carried over to this year; that’s the first part of my answer.
The fund has existed since 2017, and I’ll get back to you with the exact amount of the fund since its creation. Indeed, there’s a committee that selects projects to be undertaken under the leadership of the Centre for Greening Government; this committee uses well-established criteria to select projects that will receive funding in a given year and in the future.
The program grants funding for a number of projects being implemented within departments and agencies such as National Defence, Parks Canada or the Natural Sciences and Engineering Research Council; a number of departments are receiving funding. There’s some accountability provided on the Centre for Greening Government website; all the information pertaining to projects that have received funding is provided, including the amounts and the nature of the projects for which funding has been granted.
Senator Gignac: My question concerns the committee makeup; is it comprised of public servants or external members? Is care taken to ensure their independence? Previously, everything was a matter of public record, but at some point, there was a conflict of interest; I just want reassurance about the committee’s governance.
Ms. Cahill: I’ll respond in writing about the governance because I don’t know the answer.
Senator Gignac: I’d also like details on the appointment process and how it works.
My second question is on a different subject and is for Ms. Beaumier-Robert. Welcome, madam. There’s an additional $2 billion for the provinces for health care. I’m curious; there is a breakdown by province, but are there conditions attached to the funding? If so, what are those conditions? We know that the Quebec government is sensitive when it comes to conditions set by the federal government.
Of that $2 billion, an amount of $447 million is for Quebec. We understand that these funds will be used mainly to alleviate pressure on emergency rooms; did Quebec agree to sign the agreement with the same conditions as the other provinces, or is this an asymmetrical agreement?
Ms. Beaumier-Robert: Thank you for the question. I’ll ask my colleague Alison McDermott to respond.
Alison McDermott, Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance Canada: Thank you for the question.
The additional $2 billion is specifically intended to address immediate pressures in emergency rooms and operating rooms of pediatric hospitals. There are no conditions associated with this transfer or payment.
You’re right, though, when you say that there are conditions associated with data sharing in the major health plans, as well as conditions associated with other portions of this plan. Negotiations are under way with the Quebec government and the other provinces. I believe a bilateral agreement with the British Columbia government has been revised, but that’s the only one that’s been concluded at the moment. Discussions are ongoing.
[English]
Senator Smith: Ms. Boudreau, I just wanted to follow up on one of the 10 items that you listed regarding the $2.1 billion in transfers for departments and agencies for negotiated salary adjustments. Can you talk a bit about how these negotiations will impact the government’s planned reductions on the use of professional and special services? What is the government doing to assist departments to attract highly skilled and highly technical workers?
Ms. Boudreau: Thank you for the question. I would say it is a different challenge. You will have heard me say in the past that it is really up to each deputy minister in each organization to decide what’s best in order to deliver their mandate, to have more employees or to have professional services.
I would like to remind the committee members that professional services is comprised of 14 categories, some of them being engineering, health services, security, translation — so if you think about management consulting, this represents a very small amount of the total spend on professional services. I will stop there in terms of the right split between the two because, again, it is really a question for the deputy minister of any organization.
Senator Smith: Maybe we could move on to another question. The Treasury Board secretariat set out new guidelines for public service managers who use outside consultants for certain programs. The guide is intended to help these managers decide when to outsource work and when to leave the work for internal staff. Can you talk about this guideline that has been developed and outline conditions and factors that would make it acceptable for managers in the public service to use outside consultants?
Ms. Boudreau: We will be happy to provide more information. My colleague, Ms. Tattersall, who is the architect of that guideline will answer that.
Samantha Tattersall, Assistant Comptroller General, Acquired Services and Assets Sector, Treasury Board of Canada Secretariat: Yes, thank you for the question. As a result of the work that we did for the review of McKinsey, we looked at the issues we were seeing. One of them was around professional services and providing some guidance, because there wasn’t guidance to managers; we have a lot of guidance to procurement officers. My directive will be one that will help procurement officers to know what to do when they procure. But there wasn’t a lot of guidance to managers to think through when they needed to make a decision about whether to proceed with professional services or not. It is to help them think through that, and also to remind them of their responsibilities as “business owners,” how they go out and complete those contracts and then how they manage those contracts. It is really to supplement what we have in our directive on procurement and really speak to managers when they make those decisions.
Senator Smith: It kind of scares me when you say, “training managers how to make decisions.” Would some of that not have been done in the recruitment process or the development of these managers?
Ms. Tattersall: It is embedded already in the delegation courses. Every manager, before they get their financial delegations, has to go through courses, and there is a procurement element to that.
What I will talk about is their responsibilities under the sections 33 and 34 of the Financial Administration Act, but there was nothing specific about just helping them think through when they are making a decision whether they need these resources, and how it aligns with their HR plan, et cetera. It is to help fill that space and provide some guidance to managers.
One thing I will say is that since we released the guide, we will link that guide now into the delegation courses as well, working with the Canada School of Public Service.
Senator Smith: Again, as I listen to your response, having worked in big and small business over my career, it makes me a little nervous as to — I’m not trying to be rude — the competency of some of your management staff. How are you evaluating them through this program development in terms of their own person development? How fast are they producing exactly what you want in terms of their performance indicators?
Ms. Tattersall: Perhaps it is important for me, again, substantiate that this is additional guidance. There are delegation courses before managers can go through and sign off. One, there are training and responsibilities and accountabilities. Second, within a department, they will have internal controls and governance around procurement that are entered into. There will be delegations about how much a manager at a certain level can approve.
All those internal controls exist. I don’t want you to be worried that this is something that didn’t exist. This is to supplement the robust system that’s already in place. This is just to help. As we were seeing with professional services — we saw an increase in the use, just to go back to first principles about whether there are other HR strategies that need to be looked at before turning to professional services.
Senator Smith: Do you feel that the system is in place where you are getting the proper performance from your managers so that when they hire outside third-party people, it is not just to protect themselves in terms of their inability to deal with situations?
Ms. Tattersall: I would go back to what Ms. Boudreau was saying, which is that each department deputy head is accountable for managing their resources, and they will have the internal controls and governance around how they manage them. Sometimes, there will be legitimate reasons to engage with professional services. Ms. Boudreau has spoken about architectural, engineering and contaminated sites, et cetera. So it is guidance to support the already existing internal controls and governance.
Senator Smith: I was looking at the judgment issue in terms of the competence level so that you are able to have high performers and make sure you identify those who are high performers and those who are not, making sure you only hire outside third parties when it is absolutely necessary.
Senator MacAdam: Budget 2023 highlighted that the government would continue to work with federal Crown corporations to ensure they make appropriate spending reductions that would account for $1.3 billion in savings over four years, starting in 2024-25. As some Crown corporations do not operate from an appropriated vote but rather are self-funded and file annual reports with Parliament, I’m wondering what mechanism will be used to ensure that these savings can be realized.
Also, are there designated Crown corporations that are supposed to make up that $1.3 billion in savings?
Ms. Boudreau: Thank you for your question. It is a question for the Department of Finance. I will ask my colleague, Evelyn Dancey, to give you an answer.
Evelyn Dancey, Assistant Deputy Minister, Fiscal Policy Branch, Department of Finance Canada: Since the time of the budget announcement, the Department of Finance and Finance officials have played a bit of a coordinating role because, as you say, there are Crown corporations who are not appropriated — the enterprise Crown corporations that tend to be self-funding. They’re subject to different kinds of governance structures. However, what we have done is communicate the government’s expectations — as articulated in that budget — that the enterprise Crown corporations will abide by the spirit of this and make commensurate reductions to the core departments and agencies that are within the appropriated process.
The way this is proceeding is that the Crown corporations — each according to their corporate planning process — as they are coming forward to seek their responsible ministerial approvals — if they are borrowing Crown corporations, then they require borrowing approvals from the Deputy Prime Minister and Minister of Finance — are made to articulate, in those planning documents, what their discretionary base is for the purposes of identifying the savings and then what their savings plans are. So, corporate plan by corporate plan, it is coming through as each enterprise Crown is moving through its planning process.
Senator MacAdam: Are those plans open to the public so you can see what was in the original plan versus what they achieved — what the actual result was? Can you compare whether or not they actually achieved these savings?
Ms. Dancey: Yes, the disclosures will be in each enterprise Crown corporation’s corporate plan summary as they are approved by the responsible minister and the Treasury Board.
Senator MacAdam: So it shows the budget in the act?
Ms. Dancey: Yes, it will be public through that mechanism.
[Translation]
Senator Dagenais: My question is for Ms. Boudreau. I would like to ask you a few questions about the $300-million budget for the Dairy Direct Payment Program to help dairy farmers mitigate the effects of market access commitments under the Canada-United States-Mexico Agreement. This agreement was negotiated under the Canada-United States-Mexico Agreement.
Is this a recurring payment, or is this a comprehensive and final indemnity related to the concessions made by Canada to sign the new free trade agreement?
Ms. Boudreau: Thank you for the question.
I don’t have the conditions for that amount with me, but I will follow up with my colleagues. Then I can provide you with a due date, which the chair will communicate to you at the end of this meeting.
Senator Dagenais: That’s great.
Can you tell us if this amount to offset the losses of Canada’s dairy farmers is the same amount forecast by Minister Freeland when the new free trade agreement was signed, or has it been adjusted to take into account the use of duties granted to American producers? I would like to know on what basis that amount was decided, and when and how that $300 million will be distributed.
Ms. Boudreau: Again, thank you for the question.
Once again, I’ll turn to my colleagues from Finance Canada to see if they have any comments or a more detailed response. No? Then we’ll provide you with a full answer in writing.
Senator Dagenais: I’ll continue on the same subject; it’s going very well.
Aside from dairy producers, are there any other industrial sectors to which the government must pay compensation directly or indirectly related to the new free trade agreement with the United States and Mexico?
Ms. Boudreau: Again, I’m sorry. It’s impossible for us to give you an answer today, but we will send you one in writing.
Senator Dagenais: That gives me time to ask you more questions.
Do dairy producers have to justify something in order to receive compensation, or is everything already pre-determined?
Ms. Boudreau: Thank you. We’ll follow up, as agreed.
Senator Dagenais: You can get back to us in writing.
Ms. Boudreau: Yes, we’ll provide you with a written response. Thank you.
Senator Dagenais: Thank you very much, Ms. Boudreau.
[English]
Senator Pate: Thank you to the witnesses for appearing. I have a question for Treasury Board and then for Finance as well.
My first question is this: You are seeking $2.1 billion in authorities for transfers to departments and agencies for negotiated salary adjustments in the supplementary estimates. Over the summer, the interim Pay Equity Commissioner rejected a proposal from the Treasury Board Secretariat, or TBS, to create multiple pay-equity plans for core public servants, stating that:
TBS has not demonstrated that the proposed three plans would be gender-neutral and would not reinforce occupational gender segregation.
Could you please let us know if and how pay equity was promoted in the salary increases covered by Supplementary Estimates (B), in particular for Indigenous and newcomer women doing public sector work, who continue to face larger pay gaps?
Ms. Girard: No, the pay equity payments are not part of this year’s collective bargaining result. Because the act came into effect in 2021, each federal employer has until September 3, 2024, to complete for us in the core public administration, or CPA, and the RCMP the negotiations with bargaining agents that you referred to at the two tables that we have: one for the CPA, where we have 17 bargaining agents representing the whole group, and one for the RCMP, where we have four or five bargaining agents representing the complement of employees who are there.
Once pay equity agreements are made and we look at the job classifications in each of these subgroups and have identified classifications where there is a female predominance, then we analyze whether there are pay discrepancies and if adjustments will need to be made. When that plan is complete, we will bring it to the Treasury Board for approval, and payments will be made at that time.
So during our negotiations, we will do estimates of what it could look like. However, at this point, we are still in negotiations and discussions — I would say — at the pay equity committees to agree with bargaining agents on which classifications are indeed of female predominance and then, with the methodology that we agree on, what the wage adjustments would be. Therefore, it would be impossible at this point for us to estimate what the corrective measures will be.
Senator Pate: Are there directions or directives — guidelines — that you are providing to departments that you can share with the committee to show how you are trying to ensure that there is compliance and that the issues raised by the interim Pay Equity Commissioner are addressed?
Ms. Girard: On the Treasury Board of Canada Secretariat website, we have a whole new section on how we are implementing pay equity in the core public administration. It is the President of the Treasury Board, who is responsible for those negotiations on behalf of the whole core public administration, including the RCMP.
Senator Pate: For Finance, recent research in Vancouver by Dr. Zhao on the effects of cash transfers on homelessness has used several very innovative measures for identification, replacement services, to no-cost checking accounts and other financial supports that they’ve provided through the study to ensure the cash can reach homeless folks. The project was funded by the Government of Canada’s Innovative Solutions to Homelessness funding stream.
Are there ways that you are working across departments to draw on these and other similar findings to inform your work on low-cost banking and barriers to banking?
Ms. Beaumier-Robert: Thank you for the question. I will ask my colleague to come to the table and provide an answer.
Ms. McDermott: Thank you very much. I can’t speak to the specific study in question. I would say that the government has been undertaking efforts more broadly to ensure that all Canadians, including homeless persons, have access to the kinds of programs that are intended to support them.
One of the examples of this is that, for example, we have the Canada child benefit that is intended for families with children. It spans income levels, but it is most generous for those at low income levels. This is a program available through the tax system. There has been a lot of outreach to try to support individuals who are not participating in the tax system to enroll and to participate so that they can have access to these benefits.
I would say that our colleagues in the new Ministry of Housing, Infrastructure and Communities who are responsible for the homelessness programs would be good to talk to about these issues. Also, our colleagues at Employment and Social Development Canada that have the anti-poverty strategy would be well positioned to talk a little more about some of these efforts on the part of the Government of Canada.
Senator Pate: Thank you.
[Translation]
Senator Galvez: Before I ask my questions, I’d like to say that it’s very refreshing to see so many women responsible for important files in very important departments such as the Department of Finance and the Treasury Board.
[English]
As Ms. Beaumier-Robert mentioned, the supplementary estimates include $157 million in statutory authorities related to the dividends back for the Hibernia project. I have three questions related to that.
How long will it take the Government of Canada to recover the cost of their investment in this project? How will the return on investment be impacted as the Canadian economy transitions away from fossil fuels, given that this goes from 2019 to 2056? How is the Hibernia project infrastructure safe in terms of the threat of extreme weather events, such as the one that touched this site during the storm in 2018, which was the worst storm in 30 years?
Ms. Beaumier-Robert: Thank you for the question. I do not have an expert at the table today who can answer those questions, but I can commit to take it back, look into it, and we will make sure to provide something in writing.
Senator Galvez: The Treasury Board of Canada Secretariat has approved four locations through Vote 5, as was mentioned, which allows the TBS to supplement all their appropriations and to provide for miscellaneous, urgent or unforeseen expenditures without waiting for the next supplementary estimates. Were any of these urgent or unforeseen expenditures to be paid associated with climate change, costs associated to extreme weather events, or related to health care needs associated, again, with climate risk, respiratory illness, health problems, pandemic costs?
Ms. Boudreau: There were only two allocations that have been made lately. I will need to go and see exactly which department received those two allocations, and to go back to your specific question if we can find those types of measures for those two allocations.
Senator Galvez: In the supplementary estimates, there is $11.9 million for critical operating requirements. Can you please outline what these critical operating costs are and if they are associated outside the established operating budget?
Ms. Cahill: Thank you very much for your question. Those critical operations are, in fact, related to operating budgets in the Office of the Chief Human Resources Officer.
Over the years, with all the programs that have been added to the Chief Human Resources Officer, or CHRO, we ended up in a situation of program integrity. The funding will help to ensure the CHRO and her team respond to the mandate letter of the president of the Treasury Board. It will also help deliver on critical programs under the Chief Human Resources Officer, such as classification, diversity and inclusion, and also substantiate the Office the CHRO. This is entirely operating expenditures for the Office of the Chief Human Resources Officer.
Senator Galvez: Thank you.
[Translation]
Senator Loffreda: Welcome, everyone.
[English]
It’s good to be in such great company. Welcome to our Finance Committee. My question is for Finance Canada.
As part of the department’s goal to ensure that Canadians enjoy stronger, more sustainable and inclusive economic growth that contributes to higher standards of living, you have set a goal of having the employment rate among the population aged 15 to 64 ranking among the top 15 countries. The current trend, however, is going in the opposite direction. We went from thirteenth among the OECD countries in 2019-20 to fourteenth the following year. We currently stand at nineteenth in 2021-22.
Do you have any commentary on this downward trend? Is any plan contemplated to reverse this trend? Why has the department determined this result indicator as a priority?
Ms. Beaumier-Robert: Thank you for the question. My colleague has joined us at the table.
Julie Turcotte, Acting Assistant Deputy Minister, Economic Policy Branch, Department of Finance Canada: Thank you for the question. In terms of labour market performance — that is discussed in the 2023 Fall Economic Statement — Canada has done very well. If you look at employment strength among the G7, we’ve seen the strongest growth among these countries.
We also have our labour force participation rate for the core working-age population. The 15 to 64 age group is at a record high, and similarly for the unemployment rate.
What is happening, though, is that, obviously, the overall employment rate is affected by aging of the population. In Canada, as in other countries, we are aging. It is bringing down the overall employment rate. At the same time, as I said, for the core working-age population, it is at a record high. We also have strong population growth in Canada. We are among the first few countries in the world in terms of population growth, the top 20.
That is providing some offset to the population aging factors, but it’s difficult to mitigate these structural impacts on aging populations.
Senator Loffreda: So it’s basically demographics, if I understand correctly.
Ms. Turcotte: It’s demographics.
Senator Loffreda: Why this result indicator as a priority and not others? There are so many others that could have been chosen. Do you have thoughts on that?
Ms. Turcotte: My understanding is that we chose the working age population unemployment rate, so that’s trying to extract from aging of the population. That’s important because it’s at the core of the functioning of the economy, core of the well-being of people, being able to find a job, have good incomes, so usually, when there is a high employment rate, you also have higher income among the population. It helps to pay the bills, so that’s a very positive sign of a healthy economy.
Senator Loffreda: Is there any plan to reverse this trend?
Ms. Turcotte: On the unemployment rate, when we are doing these comparisons, it’s difficult to use the latest information. We have to use what is available through the OECD or other international organizations. When we look at the latest trends in terms of the employment rate, we’re at a record high in Canada.
I think there are some efforts to increase it further. The child care initiative is really aimed at improving labour force participation for women, and we’ve seen a great progress on that front with an edge compared with women in the U.S. We have way more women in the labour force in Canada.
Senator Loffreda: Thank you for that answer. My next question is for TBS. TBS is seeking an operating budget carry forward of $2.4 billion to the current fiscal year for federal organizations, and the largest amounts are from National Defence, $793 million, and the Public Health Agency of Canada, $353 million. Given our global geopolitical situation and the status of our health system, why are National Defence and the Public Health Agency of Canada carrying forward such large amounts?
Ms. Boudreau: Thank you for the question. This is a methodology that is applied to all departments and agencies. All departments can carry forward operating funding up to 5% of their Main Estimates, so from the beginning of the year to the next fiscal year. By doing that, we’re calling that prudent fiscal management. They don’t have to spend everything by March 31. They can carry forward and be able to pay for things that are very important for those organizations, and it was recognized by the AG a long time ago as a best practice.
Senator Loffreda: As a best practice, but there’s no particular reason why those two departments have such large carry forwards? You’re not aware of the reason? It’s managed by their own ministries?
Ms. Boudreau: DND has one of the largest budgets, so by extension, if we apply 5% to a big budget, they will be able to carry forward a large amount.
Senator Loffreda: Some people will tell you it’s not big enough.
Ms. Boudreau: If you want more detail, that will have to come from DND, the department.
Senator Loffreda: Thank you for that.
The Chair: Honourable senators we will move to the second round. I will now recognize Senator Marshall, to be followed by Senator Forest.
Senator Marshall: Thank you very much, Mr. Chair.
Ms. Dancey, I have a few quick questions for you before I go back to Ms. Boudreau.
There are a couple of borrowing authority reports that I’m expecting to see fairly soon. One is the annual report, and I’m expecting it to be some time before Christmas. There’s also a triennial report once every three years under the Borrowing Authority Act. Do you have any information on both of those or either of them?
Ms. Dancey: I’m not responsible for the debt management and borrowing authority of finance, but this is a straightforward question we can follow up on.
Senator Marshall: Thank you. The other question I had relating to that is in the budget finance was estimating that the government would need to borrow $63 billion this year, and I was looking for the revised figure. Could you add that too?
Ms. Dancey: Sure.
Senator Marshall: Thank you very much.
Ms. Boudreau, I wanted to talk about one of the recent reports of the Auditor General and the problems with the IT systems with government. I’m particularly interested in the Benefits Delivery Modernization programme, or BDM. She was very concerned about that, and I think the estimate she put on it was about $3 billion, and she indicated that she was expecting the cost to go higher and for the delivery date to be extended out. In her report, she had visions of Phoenix and mentioned it specifically and was very concerned that we might have a repeat of Phoenix on a larger skate.
Can you give us an update as to what is happening with regard to that, and also other systems within government, because every report now I’m reading, there’s a problem with the system? We saw the Environmental Commissioner mentioned it with regard to fisheries data, and I noticed the Auditor General in the short summary she provides to the Public Accounts up front, she’s very concerned about the information that’s being accumulated for the Public Accounts. She indicated she had to do extra audit work in order to rely on the numbers that were being used.
Can you give us an update on what is happening with the big system but also all systems within government?
Leonard Bastien, Senior Assistant Deputy Minister, Office of the Chief Information Officer, Treasury Board of Canada Secretariat: Thank you for the question. Len Bastien, Senior Minister Deputy Minister with the Office of the CIO, Treasury Board.
That’s a very broad question.
Senator Marshall: Yes, you can start, and I’ll appreciate your comments.
Mr. Bastien: I’ll take it in pieces, if I may, please. The audit recently published on the IT debt and the mortgaged future of our IT systems that have been going on for over a decade has left us in a precarious position of dealing with legacy systems. I think a lot of this audit report is well founded. We welcomed it, actually, because it’s a bit of a state of the union of what the reality is for us as we look to move forward with programs, and I’ll segue, like the BDM programme.
As we try to modernize these legacy systems, it’s not happening as fast as we’d like. It’s partly because some of these legacy systems are so legacy and expensive to modernize. The other big piece is the talent. Our ability to attract, retain and develop talent that can add value to these situations has become difficult over the last period of time, as I’m sure you’ve heard. The audit captures a lot of this for us, and we’re taking action.
The difference between anything and Phoenix going forward is the amount of oversight and diligence that we’re putting in place and the gates that we are holding people accountable for.
Senator Marshall: I want to make one comment because I know my time is running out. The concern I would have, just based on her report, is we know the problem with Phoenix, and it’s carrying on, as somebody responded to Senator Forest. That affected public servants, but if you have a problem with the delivery of money to people outside government, senior citizens, et cetera, it’s very hard to unravel Phoenix. It will be doubly hard to unravel problems with payments to people outside of government.
I just want to make that point because it’s very concerning. She devoted a full report to that system.
Mr. Bastien: Indeed, the BDM programme has recently been audited by our own office. We take it very seriously. Obviously, it’s a very astute observation and why we’re not pressing ahead with any cavalier quick-to-market solution.
Senator Marshall: My time is up, isn’t it? Thank you. Third round if there is one.
The Chair: If you want to add comments, you can do so in writing.
Mr. Bastien: If there’s anything else I didn’t cover, we’ll follow up.
The Chair: You can look at the transcript, thank you.
[Translation]
Senator Forest: I’m going to continue along the same lines about concerns, such as what happened with the Phoenix pay system and the number of calls for tender that the federal government can make. Have we learned anything from all this? Are our specifications, upstream of the call for tenders and the contract, very rigorous? Are we giving ourselves the opportunity to try things out? Has our tendering process used the Phoenix experience to refine procurement methods?
You were talking earlier about aging software; that’s a problem when you change software families. It’s a very daunting challenge; how do you see that challenge? How do we make sure that those who provide us with accountability are responsible for the transactions we enter into? We’re talking about Phoenix, and we just talked about Canada Life; that was in June of this year. There were major adjustments throughout the transition. Some people told us that there was an inordinate number of calls, but we have to learn. As the saying goes, once burned, twice shy; in this case, we were burned again, and were once again faced with a company that did a very poor job of delivering the expected services.
Ms. Girard: I can tell you a little about the Canada Life situation; my colleague Samantha can round out my answer.
As part of the contracting process, what we have done — and this is a good practice — is first a call for tenders. There are several stages. We no longer go directly to the tender, when companies or experts in a field have to offer us a well-conceived solution; it’s a final offer, and there’s a proposal with a view to winning the contract.
In the case of health care, we have previously issued three calls for interest to obtain feedback and advice from companies and experts in the field to see how we should actually adjust our criteria, if at all, and how we should position them so that there is a match between demand, need and service rendered. This practice is already in place.
We had to go through a transition period. I can tell you that it was quite an undertaking. It’s the largest plan; we’re talking about 1.7 million members. Is it perfect? Not yet. However, the transition period is also good practice, as we can see that by December they will have met the service standards set out in the contract. Wait times are now one to three minutes, according to the terms of the contract. As I understand it, and according to Canada Life’s data, by the end of the week, all pending files will have been processed.
Obviously, we’re also taking stock of this transition period, since it will be the dental insurance component’s turn next year, so that we can apply as many of the lessons learned as possible to future implementations.
Senator Forest: Thank you. We often have an image; we look at the maritime procurement policy, with cost overruns and deadlines that aren’t met. We’re looking at a number of very important acquisitions made by the government; we may not hear about the good news, and we may be concerned about what isn’t working well, but we’re talking about billions of dollars here.
We have to go through the bidding process for observation aircraft directly with a company; we’re in a position to ask ourselves important questions about how we ensure healthy competition and how we make our suppliers accountable responsible for the services or products they provide. That doesn’t answer my question, but it’s good to hear, Mr. Chair.
Senator Gignac: My question is for the Treasury Board. Ms. Boudreau, I would like to continue the discussion from the first round of questions on the use of external professional services and consultants. If I understand correctly, on October 5, you published a guide for your managers to help them know when they should use external or internal services.
Does that mean they were sort of left to their own devices before? Second, will more approvals or justification be required to use external services? What will this guide change? Then I have a second question for you.
Ms. Boudreau: Thank you very much. My colleague Samantha will answer your question.
Ms. Tattersall: Thank you for the question. This is the first time that Treasury Board has published a guide for managers. As I’ve said before, there are always internal controls under way within departments that require us to define how our resources are used.
[English]
As a manager, to be able to sign off on anything, I’ve had to go through delegation training. There are key leadership competencies that all managers have to adhere to, and those are set through the Office of the Chief Human Resources Officer.
What we saw within OCG — the Office of the Comptroller General — we issue a lot of guidance to procurement officers. What you will see in our directive is that there are roles for the business owner — we call those managers — and there are roles for the procurement officer. We supplemented the guidance that we provided to procurement officers so that managers can be informed buyers.
Sometimes, people will say that’s a procurement officer’s responsibility. We wanted people to understand and ask the right questions to their procurement officers, so that they can have more strategic conversations. That was the intent.
Senator Gignac: I have a quick question. The former Parliamentary Budget Officer, or PBO, Kevin Page, when reporters asked him for his reaction and so on, he made a suggestion to the Treasury Board. I’m curious, Ms. Boudreau, what your reaction to his suggestion is? He suggested that:
. . . the Treasury Board Secretariat should undertake and publish a study on performance in the provision of government services, and performance of professional services outsourcing.
How do you find his suggestion, and are you willing to do that?
Ms. Boudreau: Again, outsourcing is a responsibility of all of government. The Public Services and Procurement Canada, or PSPC, is the one in terms of procurement.
The Government of Canada has a lot of program indicators that we report on, and some of them will be obviously for those things. They will report on an annual basis. I don’t have any specific ones to share with you right now.
It’s something we do all time. We do not need a specific report for that specific subject, but again, that’s something that we are looking at. Also, we have the office of procurement and the Office of the Auditor General, or OAG, so we have a lot of agents of parliament who are looking at that as well.
[Translation]
Senator Dagenais: Allow me to make a brief comment, if it will reassure my colleague Senator Forest. I dealt with Canada Life for dental care, and I ended up on antidepressants — I’ll tell you more about that later.
That said, Ms. Girard, I have a question for you. Class actions have often made lawyers rich in recent years, to the point where courts have had to intervene in some cases to curb their appetite. Does the $23 million include the fees of lawyers who filed the suit? They generally get a percentage for their work. If so, how much? I’d also like to know whether it was government lawyers who defended the case we’re talking about or whether the government gave the mandate to a private firm. My question is a bit complex, but have you budgeted for this upcoming bill, or will the amount appear in another supplementary budget?
Ms. Girard: I think my colleague Ms. Cahill will be in a better position to talk about the financial aspects. The Department of Justice is always involved. Each department has a team of lawyers from the Department of Justice who are deployed to support our operations. There’s always a portion that’s already funded, and an effort is already being made by public servants on all files. When the department needs to seek support, it can do so.
I’ll now turn it over to my colleague Ms. Cahill.
Ms. Cahill: It’s important to note that the $23 million is divided into two parts. The first part is reserved for the Treasury Board Secretariat as employer. This amounts to $5.5 million. The remainder, which is approximately $17.6 million, is currently being distributed to departments where payments will be issued in full. Yes, Senator Dagenais, a portion is earmarked for the complainant’s legal fees. It’s not necessarily the employer’s work. As my colleague Ms. Girard explained, the lawyers who represent us are from the Department of Justice. However, the complainant, who is independent, has incurred legal costs. Since we have to pay again for the class action, this is part of the $5.5 million. Unfortunately, I do not have the exact amount because we haven’t yet received the complainant’s invoice.
Senator Dagenais: Ms. Girard, I would like to come back to the Phoenix issue, which was raised by my colleagues, including Senator Forest, and follow up on the second question. But I wanted to start with the legal fees. You mentioned that $23 million is earmarked for a class action settlement for temporary government employees. Specifically, is this for wages that were owed to these workers — since we’re talking about the Phoenix system — and that weren’t paid, or is it for damages that were claimed because of bad decisions made by public servants who refused to pay them? We know that some people refused to pay them.
Ms. Cahill: It is indeed for damages and for the expectations of certain employees who were burned by the Phoenix system, which I mentioned during the first round of questions. For full-time employees, either indeterminate or with terms longer than four months, there were two damage payments representing an award per day for a five-year period from 2016 to 2020. Employees who were students, seasonal employees or employees with terms of less than four months were not compensated. That’s why the class action lawsuit was launched. It’s not about replacing unpaid or underpaid wages. It’s really about the damages these employees suffered as a result of the implementation of the Phoenix pay system.
Senator Dagenais: I imagine there could be problems with the Canada Revenue Agency, since some received amounts and others didn’t?
Ms. Cahill: Without going into detail, there were also damages awarded in previous agreements for significant losses suffered by our employees, whether full-time or part-time. Their estates incurred damages precisely because of the implementation of the Phoenix pay system in 2016. Those claims can still be made. On the Government of Canada website, all the necessary information can be found if these employees or their estates wish to be compensated for significant losses incurred as a result of the Phoenix system.
Senator Dagenais: Thank you very much, Ms. Cahill.
[English]
Senator Pate: My question is for Finance Canada. In the consultations you’re doing regarding consumer protection, high-quality and low-cost banking, barriers to access, innovation and to digital products, it’s very clear that there are needs for low-income Canadians. The supplementary funding comes at a crucial time when financial inclusivity is paramount.
How will Finance Canada utilize the additional appropriations to address the systemic barriers that inhibit equitable access to banking services for Canadians, particularly those living in poverty? In this context, what collaborative measures with banking institutions are being considered to not only lower costs but also remove hurdles that disproportionately impact the financially vulnerable? I’m also interested in whether you have particular comments about the open banking initiatives that are being undertaken.
Ms. Beaumier-Robert: Thank you. I don’t think we have an expert at the table to answer those questions, but I’m committing to get back to you with a response in writing.
Senator Pate: Great. Thank you very much. Perhaps I can add to that, then.
With the advancement of innovative and digital financial products, how is Finance Canada ensuring that consumer protection regulations are keeping pace to safeguard the interests of consumers? Again, especially those from low-income backgrounds who may be more vulnerable to financial exploitation. If that’s another one that we can get in writing, that would be great. Thank you.
Senator Loffreda: I have a question for the Treasury Board on the government’s asset and financial management practices. I would like to refer to page 15 of your 2022-23 Departmental Results Report.
One of your performance indicators, as noted in your 2022-23 Departmental Results Report, is the percentage of key financial management processes for which a system of internal controls has been established and that you have reached the continuous monitoring stage. Your target for this performance indicator, rightfully so, which is a key indicator, is 100%.
Your result for 2020-21 was only 39%. It rose to 46% the following year, and it currently sits at 65%. This improvement is encouraging, but this is an important measure — should we be concerned that 100% is not being achieved? Can you explain to us exactly what this performance indicator actually entails or maybe give us an example?
Secondly, can you explain the underperformance? What measures will you take to achieve your 100% target by March of next year?
Ms. Tattersall: Thank you for the question. I will do my best as this falls in the area of my colleagues.
What we used to do is look at the internal controls around financial reporting, making sure that everything that is reported in the Public Accounts had the correct information. We hit 100% maturity on that. There were regular reviews of those internal controls.
What we moved to next is looking at the internal controls on financial management. What do I mean by that? It is like the internal controls around every year departments do reallocation or forecasting exercises, or they look at their budgetary needs within the department and they will have a system of controls around that.
The indicator is about how we get to a state of maturity where everybody is doing that on a very consistent and regular basis across government. While we are not at 100%, it doesn’t mean departments do not have controls in place and are not looking at those, it is getting it to that regular, steady state. And then we would move on to a new indicator in that space.
Senator Loffreda: There is no concern about not attaining 100%?
Ms. Tattersall: It is not that there are not controls, it is getting to the top layer of maturity. As you can see, we have made progress each year.
Senator Loffreda: You made progress.
Ms. Tattersall: Yes. There are working groups within our financial management sector in the Office of the Comptroller General, or OCG, that works with departments on this issue.
Senator Loffreda: You are confident that a 100% target will be attained eventually?
Ms. Tattersall: I —
Senator Loffreda: If it’s March of next year?
Ms. Tattersall: I don’t want to speak on behalf of my colleagues, but I know there are a lot of efforts under way between them and the departments on this.
Senator Loffreda: To attain that timeline.
Ms. Tattersall: Yes.
Senator Loffreda: Thank you.
The Chair: Honourable senators, for the time we have and the questions that were posed, very seldom do we go for a third round, but there is an appetite to go for a third round with Treasury Board and Finance, so I now recognize Senator Marshall on the third round.
Senator Marshall: I’m back to the Treasury Board, Ms. Boudreau. I was saying earlier that I find it really confusing to match up the estimates document with the public accounts. There was one item there in the public accounts, it’s the provision for contingent liabilities, and it went from $53 billion to $75 billion. There is no detailed listing. Every other number in that table is cross-referenced to another table, but not that particular item.
I would like to know what is in that or what accounts for the increase? Perhaps in your response, you could tell us who can bridge the estimates document to the public accounts for us? Who should we have here as a witness?
Ms. Boudreau: I’m not sure about who should be here as a witness, but we could make an attempt to provide you in writing or to put together a methodology to explain the differences between those two documents. And you will also have those differences between the federal budget, as you know, with the estimates.
Senator Marshall: I wasn’t looking for the methodology, because I think if somebody could explain a couple of the transactions, I could figure it out. If you could just provide the numbers I asked for earlier, and this one here is quite a significant amount. I was wondering, is that expensed in the financial statements? When you look at $20 billion and compare that to the deficit, it’s quite a significant amount. Yes, if you could give us the reason for the increase and what’s in the $75.9 billion.
Ms. Boudreau: We will come back to you with what we can. Obviously, it is about disclosure and those are litigations. So I’m not sure about the extent to which we can provide you a lot of details, but I will take back the question and we will provide an answer.
Senator Marshall: If you can’t give me details, I would like to know if that $20 billion has been reflected as an expense in the financial statements of the government; if so, is it in with the program expenses? That would be a help. That’s it.
Ms. Boudreau: Perfect. If I may, the first answer that I gave you about the spending review, I said up to 3% and up to 15%. I want to go back to my answer that the budget wording says, “roughly.” So I used the word “up,” but it is really “roughly.” I want to make sure that it is corrected.
Senator Marshall: Thank you.
[Translation]
Senator Forest: It’s almost a historic day: three rounds and four questions from Senator Dagenais.
Funding of $1.8 million has been identified for critical operational requirements. I found that reassuring, if only $11 million is needed for our critical operations.
Can you tell me what the critical operational requirements are? What does that include?
Ms. Boudreau: Are you referring to vote 5?
Senator Forest: Supplementary Estimates (B) contain $11.8 million for critical operational requirements. I think the criticism is coming.
Ms. Cahill: As I mentioned, critical operational requirements are really needs that allow us to continue our operations from one day to the next. I also mentioned to your colleague Senator Galvez that this is also funding that is needed to continue to pay the salaries and operating costs of the Office of the Chief Human Resources Officer for activities that allow us to deliver the president’s mandate, among other things.
Over the past few years at the Treasury Board Secretariat, mandates have increased in some of our functions, but funding hasn’t always kept pace. We’ve had to make a program integrity request to update the program, in order to continue delivering activities that are part of our mandate as an employer, as the Treasury Board of Canada Secretariat.
So those are critical needs —
Senator Forest: Those are critical needs, because the funds are earmarked for the president’s office?
Ms. Cahill: The funds aren’t earmarked for the president’s office. The budget is earmarked for an organization within the Treasury Board of Canada Secretariat. It’s totally independent of the budget of the president’s office as Minister of the Treasury Board.
Senator Forest: Can this be broken down into different items?
Ms. Cahill: Yes, in salaries or different training costs, all kinds of operating costs, actually.
Senator Forest: Which allows you to supplement the budget.
Ms. Cahill: Yes.
[English]
The Chair: Now that we have reached the end of our time, we will conclude the meeting. I would like to thank Ms. Boudreau and Ms. Beaumier-Robert and their teams.
[Translation]
Your presence at the Standing Senate Committee on National Finance is very much appreciated. It’s important to remember that we all have the same goals for Canadians. As you know, the Senate has a duty and a responsibility to take the time to do this work, meaning to study the budget.
[English]
On this, we have an agreement, Ms. Boudreau and Ms. Beaumier-Robert, that questions in writing will be directed through the clerk. Is that agreed upon? There is a time frame I would like to share with you. I would like to remind the witnesses to, please, submit written responses to the clerk by the end of the day Tuesday, December 12, 2023.
Before adjourning, honourable senators, I would like to remind senators that our next meeting will be tomorrow night, November 29, 2023, at 6:45 p.m. to resume our study of Supplementary Estimates (B) and we will have the following departments: Crown-Indigenous Relations and Northern Affairs Canada and also Indigenous Services Canada.
[Translation]
Before we adjourn, I would like to thank the entire team, through the clerk. I would like to thank the entire team, here and behind the scenes, for their work and dedication, which allows us, as senators, to do our parliamentary work.
[English]
On this, honourable senators, I now declare the meeting adjourned.
(The committee adjourned.)