THE STANDING COMMITTEE ON INTERNAL ECONOMY, BUDGETS AND ADMINISTRATION

EVIDENCE


OTTAWA, Thursday, November 8, 2018

The Standing Committee on Internal Economy, Budgets and Administration met this day at 8:30 a.m., in public and in camera, pursuant to rule 12-7(1), to consider financial and administrative matters.

Senator Sabi Marwah (Chair) in the chair.

[English]

The Chair: Good morning, welcome to the Standing Committee on Internal Economy, Budgets and Administration. My name is Sabi Marwah, and I have the privilege of serving as chair of this committee. I would like all senators to introduce themselves, starting on my left.

[Translation]

Senator Forest: Éric Forest from the Gulf region of Quebec.

Senator Dawson: Dennis Dawson from Quebec.

Senator Moncion: Lucie Moncion from Ontario.

Senator Forest-Niesing: Josée Forest-Niesing from Ontario.

[English]

Senator Busson: Bev Busson, British Columbia.

Senator Tannas: Scott Tannas, Alberta.

[Translation]

Senator Carignan: Claude Carignan from Quebec.

[English]

Senator Plett: Donald Plett, Manitoba.

Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.

Senator Tkachuk: David Tkachuk, Saskatchewan.

Senator Batters: Denise Batters, Saskatchewan.

The Chair: Thank you, senators. A copy of the minutes from November 1 is in your package. Are there any questions or changes? If not, may I have a motion to adopt?

Senator Batters: I have one question. I think it might have been correcting a misspeak on the second last item, the security issues. The second paragraph of that said that the chair also informed the committee that the Speaker has agreed that Chief Superintendent Jane MacLatchy appear on an annual basis before the committee. I think you might have said that day the Speaker would appear on an annual basis.

The Chair: I correct that. I did not say the Speaker has agreed to have a hearing. I have the exact wording which I will read to you, but it was misconstrued in the press and I thought we should clarify it here. I said the Speaker has agreed to provide this committee with a security briefing annually and that somebody will come and provide the briefing annually, hopefully it will be Chief MacLatchy.

Senator Batters: That’s good, I just wanted to make sure. I think I heard you say that, but it is good that it is corrected. Thank you.

The Chair: Any other questions or changes? If not, could I have a motion, please?

Senator Plett, thank you.

Pascale tells me that our auditor is outside. If everybody is okay, we want to reverse the order and put the financial statements first so that we don’t keep the auditor waiting and we will return to Item No. 2 after that; is that acceptable?

Hon. Senators: Agreed.

The Chair: Let’s do Item No. 3, which is the report of the Audit Subcommittee presenting the 2017-18 financial statements. We have Andrew Newman, Partner, Audit Leader, Public Sector Audit; and Pierre Lanctôt, Chief Financial Officer, Finance and Procurement Directorate. We are going to lead with Senator Moncion with a brief introduction.

[Translation]

Senator Moncion: The Audit Subcommittee of the Standing Committee on Internal Economy, Budgets and Administration has the honour to present its eleventh report. After a detailed and thorough review of the financial statements on October 16 and 18, the Audit Subcommittee is pleased to recommend the approval of the audited financial statements for the fiscal year that ended March 31, 2018. This audit was conducted in accordance with generally accepted Canadian auditing standards, by professionals from KPMG.

Your subcommittee also reviewed three related documents: The financial statements; the narrative which provides highlights from the financial statements; and the audit finding report from the external auditor.

[English]

The audit resulted in an unqualified auditor’s report indicating that the financial statements present fairly in all material respects the financial position of the Senate of Canada as of March 31, 2018, and the results of its operation and cash flow is in accordance with Canadian public sector accounting standards.

The financial statements received a clean audit opinion, as has been the case since the Senate began publishing its financial statements in 2008-09. I wish to point out that the management responsibility statement, vis-à-vis the financial statement, clearly expresses that the integrity and objectivity of the information rests with the Senate administration management and that the statements have been prepared in accordance with the Canadian public sector accounting standards.

[Translation]

The financial statements outline the financial position of the Senate as of March 31, 2018, its financial operations for fiscal year 2017-18, a summary of changes in the statement of accumulated surplus, and how the cash received from the Consolidated Revenue Funds was used by the Senate. This document also includes notes to describe and provide further details on the financial statements.

[English]

A second document, referred to as the financial highlights, provide explanations of the financial statements and the note disclosures. An analysis of variances with the budget and prior year’s expenses is also provided. It should be noted that, while the audited statements are made public, the financial highlight is an internal document. The auditors conducted the audit in accordance with their audit plan. They did not identify any control deficiencies. I would like to take the opportunity to thank the external auditor for their excellent work.

[Translation]

Pierre Lanctôt, Chief Financial Officer, Nathalie Charpentier, Comptroller and Deputy Chief Financial Officer, Andrew Newman, KPMG partner in charge of the Senate audit, and Charly Thivierge-Lortie, Audit Senior Manager from KPMG, will provide their report. Mr. Lanctôt will provide an overview of the key elements of the financial statements, and Mr. Newman will provide the audit report.

Please go ahead, gentlemen.

Pierre Lanctôt, Chief Financial Officer, Finance and Procurement Directorate, Senate of Canada: Thank you, Senator Moncion.

Honourable senators, we are very pleased to be here today to discuss an important financial matter for the Senate.

I will now take a few minutes to discuss the highlights of the financial results for fiscal year 2017-18 and the financial status as of March 31, 2018. I will follow the order of the documents you have before you.

To begin, on page 2, we see the new standards and the unusual elements in the financial statements. I will talk about the new information contained in the financial statements. Note 2k) indicates the accounting changes, namely, the five new public sector accounting standards that were in effect in fiscal year 2017-18. These standards pertain to related party disclosures, inter-entity transactions, contingent assets and contractual rights. The adoption of these standards did not have any impact on the financial results for the fiscal year.

Note 4b) provides details about accounts payable and accrued liabilities. Note 9 indicates the services received without charge from federal departments and agencies.

[English]

One unusual item this year is the pension plan for senators. In the statement of operations, there is an additional line called senator’s pension plan adjustments that presents an expense of $15.5 million. This expense represents a one-time payment made by the Senate as a result of the actuarial review conducted by the Chief Actuary of Canada.

As is the case for many defined benefits pension plans, the pension plan for senators is subject to regular actuarial review, with the latest completed for the financial year ending March 31, 2016. During the fiscal year 2017-18, the Treasury Board of Canada, which is responsible for the pension plan, followed the recommendation of the chief actuary of Canada and asked the Senate to make a one-time contribution to the pension plan in accordance with the legislation. The contribution was funded by parliamentary credits and did not affect the financial position of the Senate.

On page 3, it’s a summary of the expenses; basically explaining the main variances in the expenses for the year.

Total expenses excluding the one-time adjustment for pensions increased by 13.5 per cent, which represents $10.5 million. Five main reasons explain the increase: A higher number of senators on average, increase in personal costs, activities related to the one hundred and fiftieth anniversary of Canada, human resources transformation and replacement of corporate systems.

First, the increase in the number of senators. On average, there were four more senators during the year 2017-18 compared to the prior year, which increased expenses. As you know, senators, there is the salary and office expenses as well as the allowances. So that contributed to an increase in categories of expenses, salaries and allowances, as well transportation and communications.

The second increase of $7.7 million is related to personal costs. So those additional costs are related to additional staff and filling of vacancies. There were regular adjustments for salaries of employees.

There was also an increase in parental benefits, vacation payouts, and severance pay for $1.2 million, and payments of economic increases for unrepresented employees, employees that are not unionized, as well as administration, senators’ office employees and some other unionized employees.

The Senate’s one hundred and fiftieth anniversary activities accounted for roughly $300,000 of additional expenses, and there were several activities associated with that.

The HR transformation. During the year, the Senate continued to transform its Human Resources Directorate and spend additional money in order to move forward with that transformation.

Finally, a few years ago, the Senate started the implementation of an Enterprise Resource Planning System, and during the fiscal year 2017-18 we continue to develop and implement that system at a cost of $400,000.

It is important to note that the impact of the long-term building plans do not affect the financial statements because it’s funded separately by Public Works and Government Services Canada.

On page 4, we discuss an overview of the financial situation.

[Translation]

These statements provide an overview of the Senate’s financial status as of March 31, 2018, primarily the assets and liabilities. The Senate’s liabilities are for the most part all the financial liabilities to be paid from parliamentary appropriations in the coming year. The $5.4 million due from the Consolidated Revenue Fund is primarily the result of the timing difference between when transactions are recorded in the Senate’s books and when payments are recorded against parliamentary appropriations. The accounts receivable and advances pertain to transactions carried out in the course of normal activities.

As of March 31, 2018, tangible assets had a net book value of $5.7 million, namely, acquisition cost less depreciation. The main tangible asset categories were as follows: informatics hardware, furniture and furnishings, informatics software, and machinery and equipment.

In note 4b), the $8.1 million in accounts payable and accrued liabilities, the largest share of that or about $4 million is to pay salaries. As you know, at year end, our employees are paid two weeks after the end of the pay period. So $3.3 million is set aside for salaries to be paid in the subsequent period. There are also certain amounts to be paid to our suppliers, $3 million, and to other federal departments, roughly $.5 million. The $1.2 million increase in accounts payable over the previous year is primarily due to the retroactive amounts for staff salary adjustments.

That concludes my report. Thank you.

[English]

The Chair: Mr. Newman, do you have any further comments? I suppose you have a presentation of your own.

Andrew Newman, Partner, Audit Leader, Public Sector Audit, KPMG: Thank you for having us, honourable senators.

I am Andrew Newman, your independent audit partner responsible for the audit of these financial statements. I am also vice-chair of the Public Sector Accounting Board which issues the accounting standards the Senate has chosen to use in preparing these financial statements.

You heard the report from your management team on the financial statements, and the financial statements are the responsibility of management. Our responsibility is to provide an audit opinion on the fairness of those financial statements. Our audit is complete, including meetings with the Audit Subcommittee prior to our audit work and after our audit work to provide the detailed results of our audit.

We are prepared to sign this independent auditor’s report that you see attached to your financial statements, presuming they are approved at this meeting today, and that auditor’s report will be dated today’s date. Thank you.

The Chair: We’ll open this up for questions.

Senator Tannas: I want to ask a quick question with respect to the pension plan. You mentioned “senators’ pension plan” as if we have our own, which we don’t. We’re part of the Parliament Pension Plan. Do I understand that correctly?

Mr. Lanctôt: Yes. When I referred to the senators’ pension plan, it is the one for all members of Parliament.

Senator Tannas: So we’re together in the same plan as all members of Parliament.

The actuarial adjustment that was made, correct me if I am wrong, it was not an actuarial adjustment to do with senators, it was to do with the entire plan. In fact, we could console ourselves with the fact that if they had done an actuarial adjustment of the senators’ obligations, it would not have been $15 million, but that’s not the formula we go on. We just pay a share of the entire actuarial deficiency. Is that your understanding as well?

Mr. Lanctôt: Yes, it is one single pension plan. The Chief Actuary has done an assessment of the plan. Using assumptions, they separated the amount between the House of Commons and the Senate, and it’s their estimation of the Chief Actuary that is reflected in the adjustment.

Senator Tannas: In the total adjustment, is that right?

Mr. Lanctôt: In the split as well.

Senator Tannas: In the split as well. Interesting. Thank you.

Senator Batters: Thank you very much. I want to clear up a bit about that, too, because this is a significant amount and the public deserves to have a full explanation. The House of Commons MP pension, their portion of it, their pension adjustment amount, is in a similar situation to ours, as you just confirmed to Senator Tannas. What is the amount for the House of Commons MP pension adjustment amount?

Mr. Lanctôt: The total adjustment was $40.7 million for the entire plan. $15.5 million was the Senate, and $25.2 million was the House of Commons.

Senator Batters: $25.2 million for the MPs.

Mr. Lanctôt: If you compare the $40.7 million with the actuarial report, you will see a difference. It’s because interest has been added. The actual assessment was conducted for the year ending March 31, 2016. The payment was made at the end of fiscal year 2017-18. Therefore, there was an increased amount for interest compared to the actual amount presented in the actuarial report.

Senator Batters: Mr. Lanctôt, I know there are two different senators’ pension accounts. Could you explain what the difference is? I know one is in a small surplus position, even with the adjustment, and the other is not. Could you explain that.

Mr. Lanctôt: Yes. There is a single pension plan, but there are two accounts within the plan. The basic account, which is the account that had a deficit, is the plan that every senator contributes up to a maximum amount allowed by taxation law.

For senators who have employment income higher than that maximum, then there is a supplement, what the private sector would call “supplementary allowance.” It is a different name in this case, but it is basically an additional amount for higher income above what the basic allowance allows in the taxation law. That goes to the second account.

Senator Batters: This is a pretty significant actuarial adjustment. It’s something that’s made, I take it, from reading this every three years or so. When did that particular significant actuarial adjustment amount become known to you? What is the process of who gets advised and when?

Mr. Lanctôt: We were informed in early spring that the report existed. As you know, I joined the Senate in April. Shortly after I arrived, I was informed there was this adjustment. At that point, we discussed it with Treasury Board. We obtained all the details and started researching what the pension plan was, the legislation, and we were able to obtain all the information to support this adjustment.

Senator Batters: What is the process after you discuss it with the Treasury Board? Who within the Senate structure or outside gets to know about that particular actuarial amount prior to it eventually coming to the Audit Subcommittee, which was just a few weeks ago?

Mr. Lanctôt: The Finance team made the adjustments. We prepared the financial statements, we had discussions with the executive team, we went to the Audit Subcommittee and we’re presenting the results of the financial statements today.

Senator Batters: The pension has had significant increases in the contributions that senators are making toward it over the last about five years or so. Now, we’re up to a 50 per cent contribution rate, which was the initial goal. That has now been completed, right, we’re now at the 50 per cent contribution rate?

Mr. Lanctôt: Yes, that’s correct.

Senator Batters: Thank you.

[Translation]

Senator Forest: Still with respect to the $15.5 million adjustment, this is a defined benefit plan. The adjustment for the entire plan is intended to fulfill the promise over three years. According to what timetable was the shortfall or underfunding of the plan determined? Is this to fulfill a promise related to the plan if the Senate were to shut its doors or is it from an accounting perspective, spread out over two or three years?

Mr. Lanctôt: The actuarial valuation is based on all the benefits to be paid in the coming years and the plan assets at the time of review.

Senator Forest: So the adjustment is planned as though the Senate were to close today. In that case, it could fulfill its promise until the last pension is paid.

Mr. Lanctôt: Exactly.

Senator Forest: It is very unlikely that the Senate will close its doors tomorrow morning.

[English]

Senator Mitchell: I have a couple of quick questions. For the longest time — and maybe it still is — the accounts that are referred to here were notional accounts, and the assessment done by the actuarial general or the Canadian actuary just established these notional accounts. It seems like the $15 million is real money going to a real account; is that true?

Mr. Lanctôt: It’s a real contribution made to the pension plan. Then, are you referring to the assets of the plan, I assume?

Senator Mitchell: Right.

Mr. Lanctôt: In this case, the assets of the plan, there is no typical investment as stock of companies or bonds. It’s essentially a note payable from the government.

Senator Mitchell: Right. And that appears in the Public Accounts.

Mr. Lanctôt: Yes.

Senator Mitchell: So it’s a liability that’s carried.

Mr. Lanctôt: The asset of the plan is a liability for the government.

Senator Mitchell: Just out of interest, was any consideration given to this observation, while you were doing this assessment, that if senators, being a considerably different demographic than other members of Parliament on the other side, weren’t lumped in for pension purposes, we would then be paying about $5,000 a year less and that, in fact, we’re subsidizing that other side? Was any consideration given to why that is? Was that an arbitrary decision to lump us in, or is there an argument to be made for those two demographics to be separated out, because we’re separate institutions?

Mr. Lanctôt: There was no assessment to alternatives to the current plan. The plan exists, and by law, the President of Treasury Board has the authority to decide how to fund the pension plan. In this case, a funding request was made.

Senator Mitchell: Okay. Thanks.

The Chair: Senators, we have to vote on the financial statement, but before we do so, it’s appropriate to have an in camera session, with just the external auditor. I will ask all non-members of the committee to leave, and then we will reconvene as soon as we meet with the external auditor.

(The committee continued in camera.)

(The committee resumed in public.)

The Chair: Senator Moncion, I believe you have a motion to approve the financial statements.

Senator Moncion: I move that your subcommittee recommends that these financial statements be tabled in the Senate.

The Chair: All agreed?

Hon. Senators: Agreed.

The Chair: Any abstentions? No. All done.

We go back to Item No. 2 on the agenda, which is a report on the Subcommittee of Senate Estimates regarding the living expenses report. I invite Pierre Lanctôt and Nathalie Charpentier to appear as witnesses at the witness table.

Senator Moncion, you will speak first and then we will go to the CFO.

[Translation]

Senator Moncion: The Audit Subcommittee of the Standing Committee on Internal Economy, Budgets and Administration has the honour to present its eighth report. On June 21, 2018, your subcommittee was given the mandate to review the budget requirements for senators’ living expenses in the parliamentary district.

Your subcommittee surveyed senators last June to gather their views on their living expense budget. The information gathered helped us better understand senators’ needs. The Senate Finance and Procurement Directorate, for its part, provided both a review of historical living expenses and the requirements for setting the appropriate budget level for senators’ living expenses in the parliamentary district. These data and statistics led to a detailed analysis, guided by five key principles selected to ensure an impartial and fair review.

Pierre Lanctôt from the Finance and Procurement Directorate will present the analysis of the results and the resolution that we will have to decide upon. The Audit Subcommittee of the Committee on Internal Economy will recommend that this resolution be approved.

Before we turn to Mr. Lanctôt and Ms. Charpentier —

[English]

— I would like to sincerely thank Senators Marshall and Tannas for their hard work on this file. I greatly appreciated your openness and your support.

[Translation]

I would also like to thank Pierre Lanctôt, Nathalie Charpentier and Louise Mercier, my parliamentary assistant, for their work and dedication on this file.

Mr. Lanctôt: Thank you, Senator Moncion. Honourable senators, I will now give you an overview of the work done to support the conclusion of the review of the living expenses budget and summarize the recommendations.

I will refer to the document attached to the invitation. On page 3, we see that the subcommittee conducted an electronic survey of senators between June 18 and July 5, 2018. Sixty-nine senators took part in the survey, for a rate of participation of 71 per cent. The survey results allowed us to make the following observations: Just over 50 per cent of respondents stated that the current living expenses budget is insufficient for them to carry out their parliamentary duties; 45 per cent of participants are members of a committee that meets on Mondays; 25 per cent of respondents stated that they usually arrive in Ottawa on Sunday to attend committee meetings; and finally, the respondents stated that a $5,000 increase in their living expenses budget would be sufficient to cover their expenses related to their parliamentary activities.

[English]

We have also conducted a detailed analysis of living expenses. On page 4, we see some of the findings.

The subcommittee, working with the Finance team, examined historical budget and spending for senators’ living expenses over the last five years. It also looked at other data and practices from other organizations. These analyses have generated some observations. Total living expenses has increased by 11 per cent between 2013 and 2014, and 2017 and 2018. An average of 2.5 per cent per year, which is aligned with inflation.

However, for the same period, the budget surplus for senators’ living expenses averaged $750,000 to $800,000 of the overall budget, which is 35 per cent.

In 2017-18, about half of senators reached their budget limit or came within 20 per cent of their budget limit, which is in line with the survey results. Thirteen per cent of senators actually spent all of their budget in 2017-18, and the current budget is sufficient to cover costs for planned sitting cycles of 75 days.

To elaborate, we used guiding principles for the recommendations. On page 5, we summarized those guiding principles as: equity, adequacy, stewardship, affordability and efficiency. The team wanted to make recommendations that would be fair for all senators, considering operational needs and specific requirements; providing sufficient budget to perform parliamentary activities while making prudent use of public funds; and being cost-effective to manage, maintaining the proper control at reasonable costs for both senators and the administration.

The proposed recommendations on pages 6 and 7 consider the results of the survey. In regard to the data analysis and the guiding principles, it is recommended to continue increasing the annual living budget, the base budget, for inflation. The second recommendation is to provide up to $7,500 in additional budget for senators who have a leadership role, who sit on committees that meet on Mondays and have transportation constraints at the end of the week — so to go back home on Thursday in some cases is not possible and, therefore, having to leave on Friday requires an additional night in Ottawa. Additional amounts could only be claimed for hotels and per diems, so we don’t want to increase allowances for personal homes or for rental apartments with this additional amount.

Specific processes are being developed and a qualification assessment will be made at the beginning of the year to determine senators who will be eligible, but the budget will actually only be provided once it’s been proven that there is a need. For example, senators who have to travel on Sunday because they have a meeting on Monday but cannot travel on Monday because of distance and the time it takes will identify at the beginning of the year the possible need for the amount of up to $7,500, but the actual amount will be determined and transferred only when required later in the year. The subcommittee was very strong on making sure the budget would only be allocated for needs.

The next recommendation is to make available a supplemental allowance of $300 for additional sitting days not planned in the calendar. If we look at an example last year, there were additional days that were added to the sitting, but our budget was based on the regular calendar for a specific number of days. For any additional days, there were no additional funds provided. This recommendation is to allow senators to be able to travel and stay in Ottawa when there’s a requirement.

Again, this additional amount will only be provided if required. So if a senator, toward the end of the sitting period, if there is an extra sitting but a senator still has enough budget there will not be additional funding provided. It’s very prudent in the way we approach the recommendations.

The daily allowance for private residence is to be increased from $40 to $50. This increase is supported by the detailed expense analysis. The amount of $50 is consistent with what, for example, the House of Commons provides.

As for hotels, it is recommended not to change the maximum hotel price limit of $250 per night because we have negotiated prices in that range. We understand it is sometimes difficult to obtain the negotiated price when booking is made close to the date, but we encourage senators to book well in advance in order to take advantage of those. We are in the process of reviewing all our negotiated rates. We’re working with hotels to try to facilitate online booking with a specific code so we don’t have to call and we can obtain the discounted rate online so it’s easier for you and your staff to book with the negotiated rates.

Finally, it is important to note that the above recommendations will not require an increase in the total living expenses. As I mentioned earlier, overall there was a surplus in the budget category last year, and we intend to use this surplus to split the amount among senators who have additional requirements and are eligible for the recommended increases. Thank you.

The Chair: Let’s open the floor for questions.

Senator Plett: Thank you. Let me start off by commending the committee for coming up with a good plan. I was one of the people who presented to the committee and I am one of the people, being in leadership, who had some of the problems. So I thank the committee for dealing with this.

I struggle with part of the recommendation, however, and that is having to prove — and some staff member somewhere is going to decide whether or not — maybe that’s not the case, I don’t want to assume, but is going to decide whether a certain senator has spent enough days on a certain committee or has had enough days when he or she couldn’t fly properly.

Air Canada and WestJet continually change their flight schedules. Part of the year one can make it on time if you fly a certain day and other parts of the year you can’t because they clearly change their flight schedule by hours. We have people who are going to be sitting on a committee for maybe half a year and aren’t going to be sitting on the same committee the other half of the year. I could probably list a dozen reasons why people will have to say, “For half the year, this isn’t working for me; for the other half, it is.”

I fly home on Fridays many times because I don’t want to get home at 1 o’clock in the morning. So my last direct flight to Winnipeg is 5 o’clock in the afternoon. However, if I want to fly through Toronto, I can probably get out of here at 8 o’clock in the evening. I can still make it in a horrible way, flying through Toronto in the spring, when chances are there will be flight delays, and get home at 1 or 2 in the morning. Somebody is going to decide that, “Well, you could have gone home at Thursday. You decided, because you didn’t feel like flying in the middle of the night and everything else, to fly on Friday morning, so that shouldn’t qualify.”

I’m not speaking for myself, because I’m on leadership so I’ll qualify regardless, but I may not always be on leadership. I see this as a problem.

We have clearly found that senators are responsible. We have a budget surplus of $800,000. I think you mentioned 50 per cent of senators are well below or whatever — I don’t know what it was — and a certain number were within 20 per cent. That tells me that nobody’s trying to abuse the system. Nobody’s trying to stay in Ottawa because they just love being in Ottawa rather than being at home. So I think we’re doing this only if we have to. For us to have to come and prove to you why I had to be here, and somebody suggests, “Well, maybe you wanted to be here,” I find that to be a problem.

I would like to see us increasing this budget. I don’t think people are going to use it if they do not need it — or have some other criteria than what we have here. I’m not sure I want to put myself in the hands of somebody who is sitting behind a closed door somewhere signing off on my finances as to whether I qualified or whether I qualified for half the year. Maybe I qualified for $3,500 or $7,500. I’m not sure why we don’t open this up. Nobody is cheating the system.

I like the fact that we aren’t increasing the limits on hotels. That’s good. I think that’s fair. I was one who suggested $5,000, and the committee said to make sure there’s enough there, so it was increased to $7,500. I’m one of those who won’t have enough money at the end of this year, even with the $3,000 that I’m allowed to collect from my office expenses or whatever it is — hospitality — but not because I want to be in Ottawa.

I’m rambling. I’ll stop there. I find that part of the report to be troubling, convoluted and open to problems.

The Chair: Senator Moncion, did you want to respond to that?

Senator Moncion: Yes. First and foremost, these are some of the discussions that the committee had. We are not talking about 100 senators. These exceptions are for maybe seven to 10 senators only. The people we were thinking of were people who lived, let’s say, in Victoria, the Yukon and the Northwest Territories. From the information we got from the survey, there weren’t a lot of senators who were impacted, because most of them live close enough.

We decided to go that route so that we would deal with few exceptions, because 90 per cent of senators are within the parameters that we’ve set. That was the intent when we were looking at these exceptions. There are not very many.

For the decision-making, they will have, at the beginning of the year — and during the year, any senator who has changes in flights or whatnot will be allowed to bring a request forward. There are parameters within which the people from Finance are going to be working.

Now, there aren’t that many, so that’s why we were trying to find a solution that would be fair but also manageable. If we were talking about 50, that would be a different story. We’re talking about fewer than 10 senators.

Senator Plett: If I can ask Senator Moncion one question, chair, I won’t prolong this. Let me use this scenario. Again, like I say, I’m okay now; I’m on leadership. But let me use the scenario: I’m not on leadership anymore. I cannot fly home at 5 o’clock in the afternoon. I have a choice: I can try to get home through Toronto and get home at 2 o’clock in the morning, or I can spend an extra night in Ottawa, have a good sleep in Ottawa, take a 7 o’clock flight and get home at 9 o’clock in Winnipeg and have a full day. Or I’ve got a horrible day on Friday, having come home in the middle of the night. Would I qualify for this under those parameters?

Senator Moncion: You could. I will explain. It depends on what time the Senate sits until. Correct me if I’m wrong — you, too, Senator Marshall and Senator Tannas — your duty is to be at the Senate until the Senate rises on Thursdays. Some nights, we have sat until 8 or 10 o’clock, so you cannot go home that night. You have to travel the next day. That would be coming into extra allowances for a night in the hotel.

And that is if you run out of money. If you don’t run out of the allocation, it’s not an issue.

We find some senators miss Senate sittings because they have other commitments, so they still have enough money within the allocated amounts to be able to manage.

Senator Plett: Can I request retroactively, then?

The Chair: Listen, we’re not going to debate the policy right now. May I suggest two things, Senator Plett: One, let’s try it, and if it doesn’t work, we can revisit it. That’s always an option. Second, Senator Plett, I don’t think you will never not be in leadership, so that’s a moot point.

Senator Mitchell: I have two things quickly. I do agree with Senator Plett. There’s one element he hasn’t mentioned. It is a factor for some — not as many here as on the other side — that you get off the plane at 12 or 1 and then you have to drive in a snowstorm an hour or an hour and a half. I worked for an MP 40 years ago who had to drive to Quebec, and he was killed in a car accident on the way home. It is on my mind and that of others that we have to be careful of that.

This is great work. I’m not being critical. The guiding principles have five elements, but maybe safety considerations should be a sixth.

The other thing, the way this is written — and I think there are things outside of this — it’s tied to sitting days. There are many times when it’s warranted that a senator be here working in their office with their staff. I know one senator stayed the weekend last weekend because he happens to be sponsoring a government bill. I come in August because, before the rush of the session, I want to have a planning session with my staff.

So I hope this isn’t simply limited to sitting days and that somehow I’m not entitled to come here, sit in my office and work during those non-sitting-day periods of time.

Senator Moncion: When the amounts were established, they were established on 72 sitting days, but that’s just to give the amount for the allocation. So you work within that amount, but then again, you have to be cognizant that, yes, you can come to work at other times, but that money is when you’re in Ottawa at the Senate.

Senator Mitchell: It has to be at the Senate but not on a certain sitting day. We could run out.

Senator Moncion: Yes, you could run out, and then there will be special considerations. You have to justify these special considerations.

The Chair: The point I would make is that you can never have a policy that is going to cover every single exception that exists out there. What we have to do as reasonable people is look at the policy, find out the major areas that are not working and then come back to revisit the areas that are not working. If you start dealing with every single exception of this committee, we’ll be here for the next three hours. I don’t think that’s the intent.

Senator Batters: Thank you. I have a couple of questions to Senator Moncion or to Mr. Lanctôt. To access this particular additional amount being provided for here, one of the three requirements is that the senator is “a member of a committee that meets on Mondays and has transportation constraints.” So it’s not an either/or for that particular requirement. A senator would have to be a committee member that meets on a Monday, and they also have to have transportation constraints. You have to have both of those to meet that requirement; is that correct?

Senator Moncion: Yes.

Senator Batters: I also want to bring up the private accommodation increase that is contained in this proposal. That brings it into line with the House of Commons amount; is that correct?

Senator Moncion: Correct.

Senator Batters: The other question I have is the definition of “official role” in that one requirement. Would that only be house officers or leadership-equivalent roles, not chair and deputy chair and those types of things? Would house officer leadership also include deputy whips, caucus chairs, those types of things? What is the official role?

Senator Moncion: We do have a definition. For us, leadership was larger than just three or four people. I think we’re talking about seven or eight people in total.

Senator Batters: What does it mean?

Mr. Lanctôt: I don’t have a list. We would have to go back to the discussions we had at the meeting. I don’t have a list here, but we have identified people with leadership roles.

The Chair: Why don’t you get a response and send it to the whole committee so we all have it.

Senator Marshall: I was on the subcommittee, and we did a lot of analysis. Pierre gave us a lot of numbers to work through, and then we sent them back and asked for more.

With regard to Senator Plett’s point — and I’m sure he won’t be surprised to hear me say that — I do not agree with opening it up. There will be very few senators affected. They’re going to be dealt with on an individual basis, and I’m confident this will work. We should at least try it. If it doesn’t work, I’m sure that we will hear from the affected senators and then we can take another look at it. But at this point, I think this is a good change in policy.

Senator Dawson: I agree with that. I was on the subcommittee, and I agree with the senator. We did the study. It is much more complete than what is reported. We had many people answering.

Every case is being addressed by this rule. There will probably be a new case somewhere, and I agree that we’ll have to re-address it, but I think this solves every case that has happened and everybody that was even close to arriving at the amount. Some people said, “I was taking it out of my pocket.” We even dealt with people that never complained, but we knew they were spending money.

There will always be a new case, maybe, but again we will just revise it. I think this is a very good report.

The Chair: Are there any other questions? If not, we have a motion moved by Senator Moncion that the report be adopted. Is it agreed to adopt the motion?

Hon. Senators: Agreed.

The Chair: Agreed. Carried.

That brings us to other matters.

Senator Plett, you wanted to update us on the Joint Interparliamentary Committee. It was an action item from the last meeting.

Senator Plett: Yes. There are two issues that I have on other matters. Last week we talked about the JIC report and called Colette back to talk to us about what we were doing to solve the issue we had on October 30. So I’m here to report it’s been dealt with. I can only say it’s been dealt with.

I can also say at the NATO conference we will have a chair and a deputy chair as a result of this. We can’t really go beyond that because the meeting was in camera. So I would prefer that Colette not be invited back and put her in an awkward position. There’s not much she can say because the meeting was in camera.

It was dealt with satisfactorily, and we have a fair resolution. Senator Dawson was there as well.

The Chair: Great. I think we will take care of the invitation to Colette not to appear at the next meeting.

Senator Plett: I have one other issue, chair, for other matters.

The Chair: Certainly.

Senator Plett: Chair, we received some time ago, on November 2, an email. It deals with the declarations that we sign every year. I appreciate the fact that whoever decided to do this wants to simplify life for us, but I have a problem. It says: This year, we have simplified the process and are providing you an annual declaration by adding voting buttons. We ask that you please respond to this email by clicking on the button that corresponds with your situation. If your information has not changed, click no. If the information has changed, click yes. And then you will be required to submit something.

I struggle with that. I have no issue with us simply signing a document to say, “No, my situation hasn’t changed.” It’s very simple. But at least I have to sign it.

This will allow an intern in my office to click a button on my behalf telling somebody whether or not my information has changed. I think that is entirely unacceptable, and I am requesting that this be retracted and we all sign a form. No, my situation has not changed, end of story. Yes, my situation has changed and here is where it has changed. But at least I will have to see the paper.

My staffer may fill it out, but he or she will put the paper in front of me to sign. I am responsible. I don’t want to be responsible for some intern saying, “I’m going to help the senator because he’s so busy. I’m sure his information hasn’t changed, so let me just help him out.” I don’t think that’s acceptable.

Senator Moncion: I agree with Senator Plett because of internal controls, especially if it’s something that has to be done on a yearly basis. You need the signature, and you need the date. So you need a dated document and a signature coming from the senator that is a yearly attestation.

The Chair: Are there any other comments from anyone?

Senator Tkachuk: We’re all agreed with that?

The Chair: I’m just asking if there are any other comments.

From my perspective, it was for improved efficiency. We were eliminating another piece of paper. It just makes more work. It does not reduce the obligations of senators. We’re still accountable for people who send things out from our office. It is addressed to you, and I would assume that you would respond. But if it is the will of the committee to have another piece of paper, that’s fine with me.

Senator Batters: That particular piece of paper being signed by the senator is a very important part of accountability to the public and one that we’ve continued to emphasize that we continue to do over the last several years. So I think that’s important to continue that. I appreciate Senator Plett bringing that up.

[Translation]

Senator Forest: As Senator Plett said earlier, there is the issue of the expenses. We have to trust the senators. That said, would it be possible to simplify the process so we would not have to provide all the information? If my situation has not changed, I could simply check off a box in the document, date it and send it.

[English]

Senator Munson: Common sense is a good thing. Let’s just agree and move on. Beautiful.

The Chair: I’m not sure what we agreed on. But anyway.

Senator Munson: We agreed to sign a piece of paper. I’ve done some reflection on this.

Senator Tkachuk: It’s a declaration; it’s not just a piece of paper.

Senator Munson: Yes, I understand, senator.

The Chair: If that’s the will of the committee, that’s fine with me.

Senator Munson: I’m saying it’s common sense to do that.

The Chair: Agreed?

Hon. Senators: Agreed.

The Chair: Are there any other issues on other matters? If not, we will go in camera very briefly.

Senator Moncion: Sorry, I was asking a question.

The Chair: We’re still in public.

Senator Moncion: It was a question of contract, and I was asking Pascale if it’s something we do in public or in camera. She said either. So we will do it in public.

[Translation]

At the Audit Subcommittee meeting on October 16, 2018, the members considered extending the contract with KPMG for the audit of the Senate’s financial statements. The contract ended on March 31, 2018. The current audit contract allows for the agreement to be extended for a maximum of two years. The subcommittee therefore recommends that KPMG’s contract as external auditor for fiscal year 2018-19 be extended for one year.

It also recommends that a bidding process be initiated so the Senate can receive bids for external audit services for its financial statements. The initial duration of the contract would be three years, with possible extension by two additional years, on the same terms.

[English]

Your subcommittee reviewed the two options presented for the selection of an auditor for 2018-19 and the following years. The first option is to extend KPMG’s contract at the current condition at a cost of $29,750, taxes not included, for the fiscal year 2018-19 and to go on tender for the enactment of a contract covering the audit for the next three years. To facilitate the transition to a new auditor, the next contract would start at the beginning of the 2019-20 fiscal year. That was option one.

The second option is to initiate a bidding process for the 2018-19 audit to recommend an external auditor firm, which would start at the beginning of 2019. The second option could be more expensive and limit the audit quality of the financial statement for the current year.

The recommendation, if people agree, that the KPMG contract for audited financial statements be extended for an additional audit year, 2018-19, under the same terms and conditions as the 2017-18 audit, that an RFP process be initiated and an external auditor for audited financial statements be selected for future years prior to the end of the fiscal year March 31, 2019, and then from there.

The Chair: Any questions for Senator Moncion? Are we all agreed with the motion?

Senator Tkachuk: You said the recommendation of the Audit Subcommittee, right?

Senator Moncion: Yes.

Senator Tkachuk: I’m good.

The Chair: Agreed?

Hon. Senators: Agreed.

The Chair: Carried.

(The committee continued in camera.)