Proceedings of the Standing Senate Committee on
National Finance
Issue 3 - Evidence - Meeting of November 17, 2004
OTTAWA, Wednesday, November 17, 2004
The Standing Senate Committee on National Finance met this day at 6:45 p.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 2005.
[English]
Senator Donald H. Oliver (Chairman) in the Chair.
The Chairman: I call this fourth meeting of the Standing Senate Committee on National Finance to order. Our mandate is to examine the Main Estimates for the fiscal year ending March 31, 2005. Tonight, as part of our study of the Main Estimates, we are honoured to hear from Mr. John McCallum, the Minister of National Revenue, and Chair of the Expenditure Review Subcommittee.
Mr. McCallum, as is well known, used to be a vice-president of the Royal Bank of Canada and was nominated Minister of Defence in 2002; he had the position of Minister of Defence from 2002 to 2003, and, later, he served at the institutions financiers international from January to May of 2002.
On December 12, 2003, the Government of Canada created the Expenditure Review Committee of the Treasury Board, a new cabinet-level committee responsible for reviewing all federal spending. Initially, it was chaired by the President of the Treasury Board and composed of senior government ministers.
In July of 2004, the Expenditure Review Committee became a subcommittee of the Treasury Board on expenditure review. Its purpose was the same as its predecessor committee.
Tonight, honourable senators, we will have a number of questions about this committee and the role it plays in relation to the government estimates.
Mr. McCallum is accompanied by Mr. Munir Sheikh, who was appointed Deputy Secretary to the Cabinet, Expenditure Review, Privy Council Office. Mr. Sheikh was formerly with the Department of Finance.
Hon. John McCallum, Minister of National Revenue: Mr. Chairman, I am pleased to be here with you tonight, partly because I think we are onto a really good thing on expenditure review and I am always pleased to spread the word. Second, it is a challenging task on which I have had many consultations and I am hoping to benefit from your wisdom on the topic.
I would like to talk briefly about the philosophy, what it is we are trying to do, and then a little about the mechanics or process.
In terms of the philosophy, the first point I would make is that we are seeking to bring about a cultural shift in Ottawa. Everybody knows that we are, in the short run, seeking to find $12 billion in savings over the next five years to reallocate from lower priority areas to higher priority areas. What is less often observed is that my committee has a second mandate, which is to establish within government a permanent mechanism whereby every year, as a matter of course, expenditures are reviewed with a view to finding smarter spending and improved efficiencies and continuously reallocating resources from low to high priorities. It is not just a one-time exercise but an effort to get a permanent cultural shift in Ottawa.
I would say this is the second cultural shift. The first was to move from a culture of deficits to a culture of surpluses. I can tell you, as you all know, that was successful. When I first arrived in Ottawa as a member of Parliament, having come from Royal Bank, I was shocked to discover that my new colleagues were more opposed to a return to deficits than my old colleagues on Bay Street. I think that says a lot in terms of how that culture, that we did not want to return to deficits, had taken hold.
Our objective is to bring about a second cultural shift whereby a continuous review of expenditures becomes a normal way of doing business.
The second philosophical point I would make — to anticipate a question that one of you might ask me — is why in the world are we going through this difficult, possibly painful exercise, when we have recently announced a $9.1 billion surplus? My answer to that question derives from my first point: This should be a regular way of doing business. It is the right thing to root out inefficiencies, to shift to smarter government spending, whether we have a big surplus or a small surplus or a deficit.
I will give you an example. We are moving on smarter procurement. If you buy a file folder like this one in my hand at a government price, it costs you about 19 cents. If you buy it at a store it costs you about 59 cents. To say we should not move to find economies in that area is equivalent to saying that we should throw taxpayers' money out the window unless we have a fiscal crisis on our hands. I do not accept the logic of that. The purpose is to implement this new way of thinking, whatever the surplus or the deficit might be.
The third and final point on the philosophy is I think that we have the ingredients for success. You essentially need two things for success: You need a good idea whose time has come, and you need leadership from the top. In my opinion, we have a good idea whose time has come. Who can argue with the notion that the steward of taxpayers' money, that is to say the government, has a duty to the citizens to continuously seek out ways to spend that money in a smarter and more efficient way? That is the idea. It is a simple idea, and I have found, in speaking around the country, that it resonates.
[Translation]
I was in Quebec last week. I addressed four Quebec student groups as well as three groups of business persons. Everyone favoured this proposal. Perhaps some had doubts about its potential success, but basically, everyone thought that it was a good idea.
[English]
It is not a left/right thing. Quebec students, Liberal Party activists, are not exactly arch right-wingers. They were in favour of this. It is an idea whose time has come.
The other ingredient is leadership from the top. You need that to make something like this work, and we have it. At the bureaucratic level it is driven by the top civil servant, the Clerk of the Privy Council, who chairs a committee of deputy ministers that drives the process through Munir Sheikh, from PCO, who heads the secretariat serving the committee. The clerk has written a letter to each deputy minister requiring a 5 per cent contribution. At the political level, it is driven by the Prime Minister, who was the co-architect of the first cultural shift and is equally committed to the second, and he has written a letter to each minister instructing them to participate constructively in this exercise.
We have heavy artillery at the top and a good idea whose time has come. Therefore, I am confident and optimistic that we will succeed.
Finally, moving from the philosophy to the process, I will say a few words about that, and then if you want to ask me questions I would be happy to do my best to answer them.
We have our Expenditure Review Committee. We meet weekly. We are dividing up the source of cost savings into two parts: savings from central government activities and savings from departments. We anticipate roughly a 50/50 split in the savings, $6 billion from each of them.
At the level of central government activities we are focusing on three areas. The first is procurement, which I have already mentioned. Use the federal government's purchasing power to get better prices and require departments to buy at those prices. That will save us billions. The second is property management. Manage the federal government property more efficiently. The third is service delivery. That is to say, provide better service to Canadians and also at lower cost, initially involving HRSD.
We have examined those three initiatives in detail, and I think they will generate approximately half of the required $12 billion.
The other part is departmental. As I mentioned earlier, each deputy minister has been asked to submit the 5 per cent of their expenditures that are lowest priority in their view. In addition, we are not shy about adding other possible initiatives to the table.
All that money added up is more than we need, which is good, because we want to have a menu of choices. We want to choose wisely and strategically, and we do not want to have an across-the-board cut. That is not what this is. This is strategic savings done with a great deal of consultation.
I have done a lot of consultation. I have had about 20 meetings with different members of our caucus. I am delighted, as I said, to be here this evening. We are working on both of those fronts, the departmental and the central agency activities, with a view to having a package for the Prime Minister before Christmas for inclusion in the budget next year.
That will not be the end of the process; it will be the beginning of the process. We hope by the next budget we will have this permanent mechanism in place so that expenditure review will become a regular annual feature of the budget cycle.
Mr. Chair, those are my opening remarks. They cover the philosophy of the matter and the process. I am delighted to have this responsibility. I think it is the right thing to do. I am happy to respond to any comments or questions you may have.
The Chairman: One of the last things you told us was that you hope you can have the first part of this review done so you can hand the package to the Prime Minister before Christmas in order for it to go in the new budget. Will there be an opportunity for any parliamentary oversight of that prior to it going in the budget?
Mr. McCallum: We are having consultations all along the way.
I have already appeared before the House of Commons Standing Committee on Finance and I am here tonight. We have a caucus committee that meets regularly. I am always available.
The Chairman: I was talking about the report that you will have ready before Christmas. Will there be any opportunity for parliamentary oversight of that report?
Mr. McCallum: We will certainly discuss within caucus the general lines of it. One cannot say in advance exactly what will be in the budget. We will certainly be discussing it in general terms and soliciting advice, but I do not think we will be in a position to pre-release the contents of the budget.
The Chairman: I was not talking about the budget but about the report of the Expenditure Review Committee that you will be completing in advance of Christmas of this year.
Mr. McCallum: To the extent that it is written to be included as a component of the budget, for that reason, I do not think we can release the report in its final form.
The Chairman: I understand that now.
Senator Harb: First, minister, let me congratulate you on your appointment. I believe that the Prime Minister could not have picked a better minister than you to shepherd this complex file, for a number of reasons. This is not the first time we have had a chance to look at this. I remember back when the Conservatives were in power, they looked at the public service and the overall management, as well as the expenditures in the public service. When we came to power in 1993, we did the same thing. With Mr. Massé at the helm at the time, we also did a program review. All good things come in threes. With you coming in at the end, it will be the final sweep, one would hope, and you will be able to, once and for all, put into prospect the different things that are needed in order to have a functional government that is efficient, provides services to Canadians and which is, at the same time, responsive to their needs.
Out of a $183-billion annual budget for the government, you mentioned that you have been asked to save $12 billion. You mentioned that is over five years. I work that out to be about $2.4 billion per year. In the scheme of things, that is 1.1 per cent or 1.2 per cent of the overall operating budget as well as the capital budget of the Government of Canada.
What proportion of that do you see the government saving as a result of attritions? What percentage of that would you see the government saving through, for example, providing joint services with the provinces or municipalities or through the elimination of some programs or streamlining of other programs? Can you give us an overview of your tangible action plan and how you plan to achieve, in global terms, the $2.4 billion a year in savings?
Mr. McCallum: Thank you. Perhaps I should clarify the numbers first. The total expenditures of the government are in the order of $180 billion, but that includes debt servicing, transfers to provinces, employment insurance, old age security, et cetera. We are not touching those things. The base on which we are conducting our work is approximately $42 billion per year of departmental spending. The $12 billion over five years is approximately $3 billion per year, building up by year three or four. We are talking about $3 billion per year on a base of $42 billion per year.
Of that $3 billion, we hope to generate half of it through the central activities I mentioned — more efficient property management, procurement and service delivery. In terms of departmental savings, we are talking about $1.5 billion, half of $3 billion, over $42 billion. That is 3 to 4 per cent of departmental spending that we hope to achieve, building up to that level in three to four years. That gives you some idea of the dimensions. Past experience suggests that it is not easy, but it should be manageable. It is not a huge percentage of government expenditures. It is $1.5 billion from the central activities and $1.5 billion from departmental initiatives.
In terms of attrition, you meant job losses, I believe. There will not necessarily be any job losses net. It is true that when you have $12 billion in savings over five years, you will touch some jobs. On the other hand, in sharp contrast to program review, we are not talking about reducing the size of government. We are not talking about, in this exercise, funding transfers to provinces. Those transfers have already been funded in the announcement made by Mr. Goodale yesterday.
We are talking about finding these savings from departments and reinvesting that money into those same departments. Different departments have a different mix, but we are taking $3 billion a year in less efficient expenditures out of the departments and putting that same $3 billion into better, smarter spending in those same departments. Thus, there will be some reduction in jobs in taking the money out, and there will be some additions to jobs in putting the money in. It is not evident that there will be, on balance, a loss of jobs.
Does that answer your question, senator?
Senator Harb: It does. My second question deals with program delivery. There is a lot of talk about one-stop shopping. Human Resources Development Canada, as well as your department, Revenue Canada, makes collections on behalf of the provinces in some areas, and in other areas they cooperate. Is this something that you will be looking at? Is it part of your mandate to look at program delivery? For example, will you look at new ways of delivering the programs so you can save money by combining forces with the provinces in some areas, as well as municipalities, and, as a result, perhaps generating revenues?
Mr. McCallum: Absolutely. Let me give you a general answer, after which I will ask Mr. Sheikh to go into more detail.
This is one of the three central government initiatives of procurement, property management and service delivery, and we have had one detailed presentation on that. We will have another one next week, which I hope will wrap it up. It is well developed. The purpose is to provide better service delivery to Canadians, and at a lower cost.
We cannot do everything at once. This move to one-stop shopping and incorporating with provinces and municipalities will be an ongoing project for many years. At this first stage, we are talking about a smaller number of federal government departments, and Mr. Sheikh can elaborate. However, I think it opens the potential, going forward, to incorporate provinces or municipalities because the ultimate objective should be one-stop shopping for citizens. Citizens of Canada do not really care much which government it is; what they care about is the services. If we can combine forces and offer truly one-stop, convenient shopping for Canadians, on-line or in person, that would be the ultimate objective. We are starting down that path, but we are certainly not about to arrive at the final destination.
Perhaps Mr. Sheikh could describe the immediate project.
Mr. Munir A. Sheikh, Deputy Secretary to the Cabinet, Expenditure Review, Privy Council Office: Thank you, minister. As the minister said, this is quite a desirable avenue to pursue. Canadian citizens would be able to deal with one government, one organization, for a variety of services they receive. That is the ultimate objective.
As the minister also said, this is a fundamental change. At this time, each department is collecting its own information and providing its own service, and it is basically a situation where Canadians have to deal with a variety of departments for similar kinds of services that they receive.
As a first step in that direction, the proposal is that HRSD and SD put their delivery mechanisms together and provide service in the area of employment insurance and Canada Pension Plan. There could be other small services, like 1-800 numbers, which would be folded into this. The objective is to get to the end point, but in a way that is manageable, and even that transformation, which is the first step, is quite a substantial one and, indeed, would save a lot of money, in addition to improving services for Canadians.
There are two types of changes that will occur that would improve the operation of the program as well as save money. The first is that multi-channel provision of services would be streamlined into more on-line service for everybody in these two areas. That would save money, cut down the paper burden and reduce costs.
A second and equally important area is that because of the way services will be delivered in the future, the problem of overpayments that you may be familiar with in both EI and CPP would be reduced to a considerable extent. At this time there is a substantial overpayment made in these programs and, of course, the Government of Canada then goes after those who received these payments to recover the money. By initiating this change in service delivery, a lot of savings will occur in that area as well. It is the two sources of savings together that would help us achieve our objective.
Senator Harb: Perhaps the minister or his staff will be willing to answer a question on the estimates, from page 4.4. I do not know if the minister has the estimates book with him.
It is a general question and you probably would not need the book. It refers to your operating Main Estimates for 2004-05, and there is a line dealing with appeals. Perhaps somebody from your staff could answer this question.
The expenditure is to the tune of $95,205,000, and it shows a further revenue of $6.4 million, at a net cost of $88 million. In the scheme of things, we are spending $95 million; we are recovering $6.4 million. Is there something missing? Is there another line that is not perhaps in the estimates that we should know about?
Further, I know Revenue has been praised on a number of occasions by the Auditor General for the excellent work it does. I want to find out to what extent Revenue is using the mediation element in order to resolve some of those appeals rather than going to court, at tremendous cost to both the taxpayers and to the department. Perhaps somebody can comment on that.
Mr. McCallum: Senator, I am afraid I will have to get back to you on that question. I understood that this meeting was entirely related to the Expenditure Review Committee. I am not prepared on estimates of my own department, nor do I have officials with me who could answer questions on that topic.
Senator Cools: You will have to come back, minister.
Mr. McCallum: That would be fine.
The Chairman: This is government, but in business, when you are looking at expenditure review, one of the ways you do it is through a cost/benefit analysis. In the government and in the work you are doing, is it based upon a cost/benefit analysis? If so, could this committee be provided with the details of that analysis?
Mr. McCallum: It is not based on an explicit cost/benefit analysis across all the categories that we are considering. However, implicitly, there is a cost/benefit calculation that goes into it.
In terms of the central activities, these are initiatives that we believe are clearly smarter spending and that the benefits outweigh the costs, but there are risks associated with them.
The Chairman: How do you test that? Is there a mathematical way of testing it in your analysis?
Mr. McCallum: No, we do not have a mathematical way of testing.
The Chairman: How do you determine it is smarter then?
Mr. McCallum: Let me take, as an example, procurement, where the department has done a great deal of work in looking at what other governments do and what private sector companies do. They have made conservative assumptions in terms of the prices that we would be able to get for the items that we buy, and very conservative assumptions in terms of the take-up by departments on purchases at this price. They have calculated the savings that could be achieved by this shift and they have also very thoroughly outlined all of the policy changes, the regulatory and other changes that would be required to fully implement this. At every step, they have booked fewer savings, by a considerable margin, than they believed to be the true case. Thus, they have built conservativism into the plan at every step and have consulted with all of the deputy ministers through this committee of deputy ministers, chaired by the clerk, and so the departments that will be affected and have their budgets reduced in order to carry out this policy have been consulted and brought onside in terms of this exercise.
There are always risks of various kinds in large changes in government behaviour. Those I do not think can be truly quantified, but they have been discussed in depth by the members of my committee, the political people, and the public service people. I think these are solid numbers. They are bookable in the budget because there has been a thorough exercise involving so many people who are the major players that will actually have to come together to make this work; and also because they have been very conservative in the dollar savings. I think it will be more than that but I do not think it will be less. I think the numbers are solid.
That is the methodology we have used in this one example.
The Chairman: My difficulty with it, minister, and I do not mean to argue with you, is that I am concerned with parliamentary oversight. Normally, if a cost/benefit analysis had been done, it could have been laid before this committee, which could have studied and analysed it. In the absence of that, what way is there to have parliamentary oversight of this major process of saving $12 billion? That is my issue.
Mr. McCallum: For example, in the case I have just described to you, the procurement alone would save us something in the order of $3 billion out of the $12 billion. If you are interested, I am sure that somebody could come to the committee and go through it in detail.
The Chairman: Mr. Brison will be coming here.
Mr. McCallum: There you have a quarter of the $12 billion, which he will present to you in some detail. Mr. Brison can also present to you the property management issue. There you will have approximately $4 billion. You could invite Mr. Volpe, who is the minister responsible on the service delivery side, and there you have $2 billion. You put the elements together. You have me here today, and I could come back at a later date, if you wish, when I have more definitive action. We are still in the working-things-through stage. I think that will give you a considerable amount of information.
Senator Comeau: Mr. Minister, thank you for appearing before us. It is good to have you. Thank you for trying to help us understand the process of this review.
You will have to bear with us somewhat, Mr. Minister, because we have not been a part of the caucus to which you were referring earlier, in which you have discussed this process. Some of us are still trying to understand how the process works.
I will go through a number of what will probably sound to you like simple questions, to understand what it means. Are the departments asked to respond to questions? In other words, do they attend the committee review sessions or is this done by the committee itself?
Mr. McCallum: Do the departments actually attend our meetings?
Senator Comeau: Yes; do the ministers attend the meetings?
Mr. McCallum: Not yet. That may happen in the future. I will be having some meetings with individual ministers on the topic. So far, only the committee members have been at the meetings.
Senator Comeau: The department is then asked to submit a document, I assume, indicating the areas they are spending on, and responding to you, as the chair of the committee, to such items as public interest, role of government, federalism, et cetera, the policy test and the implementation test; and then you yourself go over what is submitted to you. Do I read that correctly?
Mr. McCallum: That is right. Each deputy minister has been asked by the Clerk of the Privy Council to come up with the 5 per cent of the budget that they regard as lowest priority, using the criteria you just listed. These ideas then come to my committee.
Senator Comeau: In order to go through each of the criteria, both the policy and implementation criteria, are they asked to put a quantitative value on each of the programs that they are submitting, so that, in other words, they are saying public interest is worth five points or affordability is worth two points? Do they do any kind of a quantitative analysis themselves and submit it to you?
Mr. McCallum: Mr. Sheikh might be able to deal with that. In the initial phase, the departments submit this at the officials' level, so I think it might be better for him to answer that.
Mr. Sheikh: Let me give you the information related to the question you asked. I would like to comment on the previous question as well. Departments were asked to submit their lowest 5 per cent priority spending using the policy and implementation tests, as you correctly pointed out. As part of those tests, departments were given a ranking of where in terms of importance the area that they were identifying was, so we have that information.
The challenge, of course, is how you combine all this information with all these tests and the rankings. That is where I think the previous question becomes quite relevant, in terms of deciding, as the senator said, the cost/benefit analysis. The nature of our exercise is such that the methodology we are pursuing, which I will describe to you, is perhaps more useful, given the nature of the task, than a simple cost/benefit analysis. We have divided our task largely into two categories. One is can we provide a service or deliver a program, without reducing its quality or quantity, at lower cost. That is a challenge. In the areas that the minister identified, for example — procurement, property management, service delivery — there really is not much need to do cost/benefit analyses because they are saying make sure that your delivery does not deteriorate; it can only go up, and can you cut costs in the process. If I were to do a cost/benefit analysis, it would be a benefit of a positive number and cost zero or negative, so the number will be extraordinarily high. That is a challenge and we are separating all those items in that manner.
Senator Comeau: I did not want to get completely bogged down in the machinery yet. The cogs are turning, I am trying to understand, but I do not want to go into it too deeply just yet.
Mr. Sheikh: That is one part, where there are only benefits in terms of costs. The cost is actually going down.
The second part, which is directly related to your question, is how do you actually make decisions when departments are not showing up at the ERC itself? In the first part of the exercise, the three areas the minister mentioned, the deputy ministers of those departments have come to the ERC, along with the ministers, to make their proposals, discuss the issues, and then hear the reaction from ERC ministers; and it so happens they are members of the ERC itself, so the departments have been there.
In the second case, of where the departments have given us their 5-per-cent information, using that, again we are trying to separate areas that are just increased efficiencies and not really much of an issue, because you are planning to deliver the same program and service at lower cost. It is a non-controversial issue. In the second part, where there are trade-offs, departments say, ``You can do this, but here is the cost.'' There are two steps in the process that would help in making the decision. One is the ERC ministers themselves will make the decision and then it goes on to cabinet.
Senator Comeau: I do not want to get bogged down too deeply yet. I seem to be getting the point. My question was, basically, is there a number attached to each individual program? If program A is worth 100 points and program B worth 95, program B is the one we will really look at; we will not touch the program with the 100 points. I assume that is not how it is done, that it is done more on a qualitative rather than a quantitative analysis. That is my main question.
Mr. Sheikh: My short answer would be there is one set of information, but because the information is on a variety of aspects of a program, the summing-up has to be qualitative.
Senator Comeau: This is just one quick question, and I will have others, but where would the government policy on official languages be placed in this? I did not see it amongst any of the criteria. Would the impact of your decisions on the official language communities of Canada be evaluated as you go through them?
Mr. Sheikh: Official languages policy is treated like any other program. There is no objective here to either increase or reduce the quality of official languages policy.
Senator Comeau: I mean that any government decision, I do not care which one, almost always has an impact, and if a government program is reduced somewhere, it almost always impacts the official languages policy — it is one the main policies of Canada — and I did not see it as one of the areas that either through the policy test or the implementation test would be considered by your committee as it studied the value of various programs. It is involved in almost any program that you want to look at.
Mr. McCallum: Maybe I can answer that. There are two points. One, there are no exemptions. Official languages wanted an exemption. Other departments have wanted one. The first point is, in terms of the 5 per cent, every department, no matter how important, is involved. Once you give one exemption, why not a second, a third, or a fourth, so the fact is there is no exemption. The second point, which I think is related more directly to your question, is that it is not officially on the list, but neither is the regional dimension. I think we have to look at these things in a judgmental way, through a number of different lenses. There is a regional lens, a gender lens and an official languages lens. We are acutely conscious of that issue, and that is one of the criteria, when we, the ministers, are sitting around the table looking at possible options, of which we will be acutely aware.
Senator Comeau: I might want to pursue it at a future meeting, minister, because I am not satisfied with the answer, but we will let it lie for the time being. I do not want to get too much into details at this point.
Tell me, minister, as you are going through this, what about programs that need to be looked at but are not even on the department list at the present? For example, let us say the Department of Fisheries and Oceans, DFO, had identified something extremely important but had no program for it now, and yet it does not fit into one of the main areas that the government has identified as being priorities. I think the government has identified health, Aboriginals, cities and child care as the main areas that it wants to look at. Given that DFO is not on that kind of high priority list, how could the department consider a program that is not even on its own list yet?
Mr. McCallum: My lot in life at this juncture is to extract money from departments. The money that I extract is then given back to departments by a different person, the Minister of Finance. If DFO is regarded as a priority, and an overstret ceterahed department, for example, then in my function we might extract very little, and the Minister of Finance, if he and the government think that DFO is really in need of something important, could use some of the proceeds from my exercise to give to DFO. My job, and the job of the committee, sadly for me, one could say, is not to give money to anyone, but we do generate money for the government and the government will then make the decision on the allocation of that money.
Senator Comeau: I bring this up because when you have a department such as DFO that has been cut to the bone, plus a few of the bones cut off and thrown out, and you are asking them to identify more programs that can be cut, even though the minister has not even been before you yet, and you will be presenting a proposal to the government before December, we are heading into an area that might cause some difficulties to that department. If you read Johanne Gélinas' report on the disastrous consequences for the Department of Fisheries and Oceans over the last few years, you will find it is almost a nightmare. There are areas where fish species are disappearing as we speak. For example, some species of the Atlantic salmon are disappearing tonight, as we speak, never to be seen again. Yet we have a very weak department that has no money. In Nova Scotia alone, out of 100 rivers, the Department of Fisheries and Oceans monitors two. It extrapolates from that and plans for a species that is disappearing from the other 98 rivers on the basis of the information it gathers on those two.
I bring that up as a case in point. If we are doing all the great things you have identified — how much we are saving the taxpayer this year — but on the other hand, we have species of salmon disappearing forever, who have we actually been saving things for? Future generations will not have the access to these salmon that we had.
Mr. McCallum: This exercise is being approached from many different directions by many different people who have a great deal of knowledge of the state of the departments in Ottawa. If what you say is true, it may well turn out that my committee would extract very little from DFO, and the government, perhaps with the funds that my exercise generates, might provide more funds for the department.
I cannot comment because decisions have not been made, but this exercise is being conducted in a flexible way, with a good understanding of the true situations in which the different departments find themselves. It is true that a number of departments are overstret ceterahed to a much greater degree than others.
Senator Comeau: I will come back to the chair's original question. The decisions will be made between now and December, and the report as to the areas where reallocations will be made will be given to the Prime Minister in December. The minister has not yet been before your committee. Time is getting short. I am not sure if we, as parliamentarians, still have time to get involved at this point. I know that you have been meeting with your caucus members, but some of us are not part of your caucus. Therefore, we feel this slipping out of our fingers. I am referring back to the question of salmon in Atlantic Canada, which are disappearing, and we are not part of the process that you have identified. We have to depend on you and how convincing the minister will be when he appears before his colleague, Mr. Goodale. In the case of DFO, it is not even on the government's priority list we identified earlier. It worries me.
Mr. McCallum: You have told me that you are seeing a number of the ministers here, and you could invite the Minister of Fisheries and Oceans, if you wish. Certainly, at the officials' level I am sure there have been many discussions. I will be meeting with a number of the ministers. However, as I said at the beginning, the rules do not permit me to say exactly what will be included in the budget before it is delivered.
Senator Comeau: I am not sure if it is appropriate for us to invite the Minister of Fisheries and Oceans to come before us to make his pitch for those items I have identified and the ones that have been identified by the parliamentary officer, Madame Gélinas. Yet it has been years since anything has been done. It is in fact up to this review committee, and I do not feel confident that that committee will give the minister the kind of hearing that I think he deserves on some of these questions. Judging from the policy and implementation tests, I do not feel comfortable.
Mr. McCallum: Far be it for me to suggest to this committee how to conduct its business, but if you have grave concerns in this area, you could invite the Minister of Fisheries and Oceans here to air these issues and to publicize the problems of that department. That could have an influence on the Minister of Finance in the preparation of his budget.
Senator Comeau: It is not for us to bypass your review committee. We are suggesting to you that the minister should not have to come before us to make his pitch because you are doing the reallocations and the cuts; we are not. We would like to know if there is a means for him to get these items through your committee and not have them reduced.
Mr. McCallum: I will certainly be in touch with him.
Senator Comeau: I suppose I have made my point.
Mr. McCallum: I think so.
Senator Ringuette: Coming from New Brunswick, Atlantic Canada, every time I hear the word ``review'' I get very concerned. In the last review of human resource allocation across all departments, Atlantic Canada human resources in regards to federal departments were cut drastically in comparison to central government. When central government opened up the coffers because they were in need of more human resources, the reverse was done. There was a lot more hiring done in central government in Ottawa than in Atlantic Canada, and that is a major concern.
However, I must say that I have a little hope when I hear you say publicly that it is a lot cheaper for the federal government to have a federal operation in Atlantic Canada because of rental costs and lower HR turnover. That was a relief, but I still have those concerns, so we will be watching closely.
If I understand the process correctly in regards to the 5 per cent the departments will shift from lower to higher priorities, the 5 per cent will be put into one central pot and given to Finance, and Finance will decide the higher priorities for that. I believe in simple things and that is how I see it. Am I correct?
Mr. McCallum: That is basically right, except for one little thing. It will not necessarily be 5 per cent for every department. The 5 per cent is the initial submission. Some departments could be zero per cent; some could be 8 per cent. You are right that the savings that we get from all of the departments will be put into a central pot and disbursed on budget day.
Senator Ringuette: You have mentioned procurement, which means goods. Does that include services such as outsourcing of legal advice, accounting advice, all kinds of professional advice that the different departments require? Is outsourcing of human resource expertise included in the review?
The Chairman: That is a good question.
Mr. McCallum: I would not say ``outsourcing.'' That is a separate issue. However, in terms of procurement, we are talking about the things that government buys, including goods and services, so that would include legal services.
Senator Ringuette: So the review will include outsourcing.
Mr. McCallum: I do not call that outsourcing. If the government buys legal services today, or other kinds of services, we seek to get the best price for those services, just as we seek to get the best price for file folders like this.
Senator Ringuette: I would like to ensure that I understand this, and you are just the right person for my example. People in Defence will take their retirement after an average of 20 years, and then they will seek to be rehired to perform their former duties as a consultant or expert, and sometimes not under their employee name but under a company name. Ten years ago, I was told that that number was about 100,000 at DND alone. That number might be wrong, but I still think it is a cause for concern. In situations like that, on the one hand, the federal government would be paying a pension to an ex-employee, and on the other hand, it is rehiring the same person for maybe even more money, because you look at an average of 20 per cent of benefits costs from payroll. Is that particular situation being looked at from one department to another?
Mr. McCallum: Let me abstract from Defence. Defence is one of my favourite departments, having spent some time there, but I do not want to speak specifically about Defence.
One of the areas in which the government spends a lot of money is consulting services of various kinds, which would include the case you mentioned, and, more generally, corporate functions — all the administrative superstructure, if you will, in Ottawa. As you yourself said, there is the perception, particularly in Atlantic Canada, that post-program- review job growth was much faster in Ottawa than elsewhere. It is more than a perception. I have checked the numbers. It is a fact.
One of the areas in which we are actively seeking economies is the corporate functions of departments, including professional services and other areas. I personally believe that we can find savings there. Some departments have come forward with such savings. Others have not. This is an area that we are currently actively pursuing and which would include, as a part of it, the issue that you mentioned.
Senator Ringuette: Mr. Minister, all the ministers have a very busy agenda, and sometimes time does not allow for attention to some of the detail. Therefore, they rely substantially on senior officials to provide good, sound advice. I come again to the experience of 1993, 1994 and 1995. I have not seen a major shift in the senior officials. Maybe they are moving from one department to the other, but I have not seen a major attrition in the pool of senior officials. I am still very concerned about the regional and rural requirements and that the necessary federal presence will be overlooked.
Mr. McCallum: Let me speak to that, because this is an issue that concerns me greatly. I am not sure if you were at that Atlantic caucus when I first made a visit.
Senator Murray: Please, please.
Mr. McCallum: I am referring to the senator.
Senator Murray: Confidentiality of caucus, after all.
Senator Cools: Caucus is a secret society.
Mr. McCallum: I had a meeting with some Atlantic Canadians, and the point that you just made was made extremely strenuously to me. Since that time, I have become acutely aware of that. I am aware that program review was very damaging to the regions, and that post-program review, the bulk of the jobs came back in Ottawa. I am determined that that not happen again.
A critical point is that this is not program review. Program review occurred at a time of fiscal crisis. Program review involved reducing the size of government. We do not have a fiscal crisis. We are not talking about reducing the size of government even by one dollar. It is a totally different situation.
At the same time, I know the Prime Minister has spoken about federal visibility. I know we are all concerned about that issue. We are, if you will, applying a federal lens. I know, from my experience at Veterans Affairs, that there are some advantages, in some cases, to having jobs in regions instead of in Ottawa. The turnover rate is lower in Charlottetown, not to mention Kirkland Lake, because those jobs are highly valued by the people in those regions. You mentioned the rental costs. It will vary from department to department, but I am determined that regional balance will be uppermost among our considerations. One has to have a balance. It is not that I am trying to reduce jobs in Ottawa, but I want to maintain this balance, because I know that is uppermost in the minds of many of my colleagues, and many Canadians. It is not only a matter of fairness, it is a matter of efficiency, too, for the reasons I have just given, about turnover, to maintain this sense of regional balance in all our deliberations.
Senator Ringuette: I do appreciate your concern, and I hope that you will transmit the regional and rural concerns to all the senior officials engaged in every department in this expenditure review process. Thank you.
Mr. McCallum: Thank you.
Senator Downe: Earlier, you stated that you hoped to have a report to the Prime Minister prior to Christmas. Will that report go to Treasury Board before it goes to the Prime Minister?
Mr. McCallum: That is not clear. We are working very closely with Treasury Board officials, but this is an all-of- government initiative driven by the Prime Minister and the clerk, as I mentioned before. All of the members of Treasury Board, whether regular or ex officio, are members of the Expenditure Review Committee, plus three others, so we are actively engaged in getting the work done. The precise manner in which the report is transmitted to the Prime Minister is not fully determined and not terribly important, relative to the more general point that this is an all-of- government initiative in which Treasury Board officials, as well as PCO officials and others, are heavily engaged.
Senator Downe: I think it is important at one level, in that it would be another set of eyes on the document. I understood your committee was a subcommittee of Treasury Board, reporting to Treasury Board.
Mr. McCallum: Technically, that is true, but it is essentially the same set of eyes because every Treasury Board minister is a member of my committee, plus three more ministers.
Senator Downe: You do not report to the President of the Treasury Board?
Mr. McCallum: Technically, you are correct that it is a subcommittee, but our plan is that we all work together in a cross-government fashion and that before the Christmas break we will have our report.
Senator Downe: Thank you. You talked this evening about reallocation and how we are trying to avoid eliminating government programs. The Auditor General was here last week and it is her view that given the significant reallocation of funds within government, it will require programs to be eliminated in order to achieve that target. There will be program elimination in the view of the Auditor General. Is that your view as well?
Mr. McCallum: It is too early to know. We are still working on that. There will certainly be an element of that. Most of it will be moving towards greater efficiency in items like the procurement and the property management that I mentioned earlier. However, I did read the transcript of the Auditor General's comments. I will be meeting her in the coming days as a consequence of one of her audits. I hope to take the opportunity to discuss this matter with her because she said that she had not been thoroughly engaged. I would like to have a conversation with her about it and see what her concerns are.
Senator Downe: The last comment concerns an earlier statement about the regional impact. One of the unintended impacts of program review in the mid-1990s was the reduction in the federal presence in the regions of Canada. When you look at the Treasury Board website, it shows, for example, between 1994 and 2004, thousands fewer jobs in Manitoba, British Columbia. That was not the plan but it was the result. I am concerned, as others around this table are, about program elimination and program reduction and the impact that will have on the regions.
Just last week, in Charlottetown, CBC employees were telling me that a reduction in the CBC budget reallocation, for example, in Charlottetown means the cameraman at the local CBC station, who has been there 22 years, will be laid off. I understand there may be a producer who will lose their job as well. That impacts on the region, on the local newscast. It is a long way from Ottawa. It is an insignificant amount of money but it has a disproportionate impact on the regions.
I know from your short but productive time as Minister of Veterans Affairs you received firsthand information on the benefits of regional dispersion of the government. In downtown Charlottetown there are 1,200 employees, as you know, who work for the federal government at the only national headquarters outside the National Capital Region, with a payroll of $6 million to $8 million, which is a significant investment outside Ottawa.
I think, chair, just to wrap up, that Minister Brison's proposal on buildings and elimination of some buildings from the government books may be an opportunity to spread those departments, agencies and Crown corporations across the country and not just centralize them in Ottawa.
The Chairman: I would love to have your response, minister.
Mr. McCallum: Well, Senator Downe, I am glad you regarded my time as not only short but productive. Thank you.
On the CBC experience, I hope you understand that that had nothing to do with the Expenditure Review Committee. No decisions of that nature have been made. I believe that was an earlier situation.
In terms of your general point, I can only repeat what I said to Senator Ringuette, that regional balance is uppermost in my mind. My experience at Veterans Affairs has taught me that there are perhaps some costs, but certainly also some benefits, in terms of the regional dimension. The Prime Minister is committed to federal visibility and so this is certainly a major element; and I think comparisons with the program review period, while naturally they remain vivid in your minds as a major negative, will not recur, in part because the exercise is so profoundly different. It is not a reduction in the size of government, there is no fiscal crisis, and also I believe that we do have firmly in mind, thanks in part to your interventions, the importance of the regional balance.
The Chairman: Could I follow up on one of the matters that Senator Downe carefully asked you about, and that relates to the relationship between this Expenditure Review Committee, of which you are the chair, and Treasury Board. You partly answered it, and I would like to ask just a couple more questions because in my opinion, it is important. The supporting function of the Expenditure Review Committee was transferred from Treasury Board Secretariat to the Privy Council Office effective August 18, 2004, a couple of months ago. What was the reason for that and what is the effect?
Mr. McCallum: I can only speculate, because that decision was above my pay grade. That was essentially a machinery-of-government prime-ministerial decision, but I think it signals the seriousness of the exercise, that it is now being driven, as I said, from the top, both politically and bureaucratically; perhaps the Clerk of the Privy Council had a role in this decision. I am speculating that he wanted to take a personal interest and so he is now driving this through his committee of deputy ministers and through Mr. Sheikh, who reports to the clerk, so it is an all-of-government exercise now, not just a Treasury Board exercise. It is driven by the clerk at the public service level, driven by the Prime Minister at the political level.
Senator Murray: Minister, I missed or did not fully understand the 5-per-cent reference. I take it we are talking about a 5-per-cent reduction that you are getting out of the departments. Reduction in what?
Mr. McCallum: We are asking them to put on the table the 5 per cent of their budget that they regard as the lowest priority.
Senator Murray: Their budget as seen where? Not in the estimates, obviously.
Mr. McCallum: Their base departmental budget, which adds up to $42 billion across the whole of the government. They then submit this 5 per cent to us; we have other inputs into the process to put more money on the table. That will then be more money than we need and so we will make choices.
Senator Murray: You are asking them to put up the 5 per cent of their A base, as it were, that is of the least priority, then where does this rule of thumb —
Mr. McCallum: Non-statutory A base.
Senator Murray: I understand that. Sorry. I will come to that in a minute.
Where does your rule of thumb, if that is what it is, that half the annual savings are to come from procurement, property management and service delivery — that would be about $1.5 billion — and the other half, another $1.5 billion, one assumes, from programs, come from?
Mr. McCallum: Where does that come from?
Senator Murray: What is the relevance of it if you are asking them to put up a 5 per cent reduction on a priority base from their budgets?
Mr. McCallum: Not all of that 5 per cent will be taken away from them. The more we can generate savings through the property management, procurement and service delivery, the less we will require from departments. The basis for the 50-50 is that we have a pretty good handle now on what savings we will get from those central initiatives.
Senator Murray: Service delivery must relate to departments. Are they offering up service delivery or are you imposing that from the centre?
Mr. McCallum: We are imposing that from the centre in cooperation with the departments, so the departments are offering up 5 per cent in addition to what they are offering on the central initiatives.
Senator Murray: I am trying to get a good understanding of this. As you said yourself, the universe that we are dealing with here is not the universe of $186 billion in government spending per year. It is the universe of roughly $42 billion per year, from which you are going to take roughly $3 billion per year.
Mr. McCallum: The way I look at it is 1.5, but fine. I do not count the central function part. That is a different kind of exercise. What we are taking away from departmental spending, I would say, is $1.5 billion per year.
Senator Murray: I had not fully understood that and I am glad to have it on the record.
I am torn between two interpretations of what is happening. At one level, I am inclined to say, ``Well, are you not concerned that since you are taking $1.5 billion out of departmental programs, rather than out of the entire universe that we were talking about earlier, that there will be some anomaly or inequities created thereby?'' You have to go where the money is. Non-statutory funds would be going to programs such as those run by CIDA, regional development and that kind of thing; if you are not going for statutory programs, that is where the money will come from.
Mr. McCallum: I will ask Mr. Sheikh to answer that question in part. Yes, we are taking $3 billion out, $1.5 billion from programs and $1.5 billion from the central functions, but the government is also putting $3 billion per year back in. We are not impoverishing that departmental spending; we are reallocating it. We are taking the money from areas where we can do things more efficiently, the same things more efficiently at lower cost, and we are taking monies from areas that we see as low priorities and we are putting all that money right back into the same departments in areas where we think there is a great need or a high priority.
Senator Murray: That brings me to my second possible interpretation, which — no offence meant — is that there is less to this than meets the eye. Really, it is not a matter that committee members need take much time or effort to consider; it is housekeeping: procurement, property management, service delivery. I do not know what has become of these tests that were to be applied, such as the public interest test. Does the program area activity continue to serve the public interest? Is there a legitimate role for government? If so, is it the federal government? These are almost the same questions that Marcel Massé was asking in 1993. What activities could be transferred in whole or in part to the private or voluntary sector? Those tests hardly apply to procurement, property management and service delivery.
Mr. McCallum: That is the good thing. We are picking the low-lying fruit, which is the rational thing to do first. If we can get, relatively painlessly, $6 billion in savings over five years through smarter government procurement, property management and service delivery, then I think we would be rather foolish not to do it.
Senator Murray: I agree.
Mr. McCallum: If we are successful in making this a permanent annual exercise, which I am sure we will be, then in future years we may have less low-hanging fruit and the decisions, on average, may be somewhat more difficult.
Senator Murray: I wonder whether, if it will be so painless and so routine, whether it is a matter that the committee needs to be concerned about.
When the Supplementary Estimates for the current fiscal year were tabled a while ago, the $1-billion reallocation initiative was referred to. It is said that $437 million had been reflected in these Supplementary Estimates. This is in addition to reductions of $309 million reflected in the Main Estimates and some $246 million, in round figures, in announced funding that has been cancelled. They give what is called a departmental overview of the $1 billion attached as Annex A. I do not know whether you have eye-balled this.
Mr. McCallum: This is the Manley exercise?
The Chairman: Minister Manley.
Senator Murray: Mr. Manley is long gone. These are Supplementary Estimates that were put out on November 4, 2004. Mr. Manley was the minister in 2003, is what you are saying. These are contributions to the reallocation process announced in budget 2003.
Mr. McCallum: Right.
Senator Murray: This is not related to what you are doing.
Mr. McCallum: I am not sure what the question is.
Senator Murray: Is this part of the expenditure review process?
Mr. McCallum: No.
Senator Murray: These numbers are not relevant to the numbers you have put on the table; is that correct?
Mr. McCallum: Correct.
Senator Murray: In what fiscal year will your reallocations be reflected?
Mr. McCallum: The first fiscal year will be 2005-06. We are committed to $12 billion over the five years beginning 2005-06.
There was an issue about the distinction between the statutory and the non-statutory expenditures.
Senator Murray: I understand the distinction.
Mr. Sheikh: I wanted to clarify the distribution of $12 billion and how it relates to the $42-billion base. The procurement, property management and service delivery are all efficiency gains. The minister gave an example; if you get a lower price for what you buy, it is not a cut in anybody's budget, you are getting the same product at a lower price and there is a saving.
If there is $6 billion of that sort, it is not a reduction in anybody's budget. We will be conservative and there will be some savings on that front. That is one part of the exercise.
The second part of the exercise is this 5 per cent information we are seeking from departments, on a $42-billion base, on what the lower priority areas are. This is all information on a standardized basis that the ERC will look at and then make choices. The real cut in departmental spending would be $12 billion, or $3 billion on an annual basis, on a $42- billion base. The first part, which is true savings without any reduction in service or programs, actually means that there will be a great transformation.
Senator Murray: Transformation in what?
Mr. Sheikh: Transformation in delivering service to Canadians, in buying products in the marketplace, in the way we manage property. This is not a small change, but a huge one.
The Chairman: Mr. Minister, Senator Murray just asked you what your job is in relation to finding this money and the allocation. As I understand your answer, your main job is to analyze various departments to try to find the $12 billion. You said to Senator Murray that those funds will go back into departments. If you find $3 billion somewhere, it will go back in the same place. However, that is not your job, is it? All you will do is find the money, and the Minister of Finance is the person who, through a budget, will put it back in; is that not correct?
Mr. McCallum: That is what I referred to as my sad lot in life. I extract and he disburses.
The Chairman: You do not have any part, any say really, in whether that $1 billion or $2 billion goes back in from where it is found, and it may not; is that correct?
Mr. McCallum: I can make recommendations to the Minister of Finance. In the course of our inquiries, we may come up with information that is relevant in terms of some departments where there are great needs. These may become apparent to me. Also, there is an entire set of issues that we have not gone into, such as the appropriate set of incentives and rewards for good behaviour.
I think it is appropriate that departments that are highly constructive in their participation in my exercise may get some reward budget-wise, and so that would be a matter for the Finance Minister to consider as well.
Senator Murray: What kind of policy is that; whether they need it or not?
Mr. McCallum: That could be an element when you are trying to bring about systemic change in any large organization.
One has to have an appropriate set of incentives, both carrots and sticks, to generate the behaviour that is required, for the public good, in this case. I believe that that could be an element. It would not necessarily be the determining element.
Senator Murray: I do not see how you can put these tests forward and exclude statutory programs. However, that is perhaps a question for the future.
Mr. McCallum: Perhaps that is a question for Mr. Sheikh. I thought that was your question.
Mr. Sheikh: The simple reason why the statutory programs would not be a part of this exercise is the desire to have savings booked in the next budget; and statutory programs, as you know, cannot be changed that quickly. However, they will not be left alone. As the minister said, this will be an annual exercise. Statutory programs will definitely be on the table in future years.
The Chairman: Minister, could I go back to something mentioned earlier? Who are the ministers on your committee? Could you tell us, please, for the record?
Mr. McCallum: Yes. There are ministers whom one might call ordinary members and there are ministers who are ex officio members. I am the chair; Lucienne Robillard is the vice-chair. The other ministers include David Emerson, Scott Brison, Andy Mitchell, Joe Volpe and Pierre Pettigrew. In addition, we have ex officio ministers, who attend some of the time, who include Ralph Goodale, Anne McLellan, Reg Alcock and Tony Valeri.
The Chairman: Minister Alcock appeared before this committee on March 10, 2004. At that time he assured this committee that Parliament would in fact be engaged in the expenditure review process. I have not heard anything from you tonight that would indicate that that is a fact. Could you tell us specifically how Parliament will be involved in this process and to what extent it has been involved to date?
Mr. McCallum: So far, to date, I am here tonight. I have appeared before the House of Commons Finance Committee. You have told me you are inviting Ministers Brison and Volpe.
The Chairman: I did not say that.
Mr. McCallum: I think you said Mr. Brison.
The Chairman: Yes.
Mr. McCallum: Mr. Volpe would be another one, if you wish, because he is involved in the service delivery.
Those are elements of involvement. I would be happy to consider other ways of involvement.
The reason I said one could not have a public release of the report is the intent is to have it in the budget, and then the budget receives several days of scrutiny by Parliament. I anticipate that the work of my committee will be a component of that budget; so that the opportunities for parliamentary scrutiny involve me and other ministers coming to committees, now and after the budget. It is a part of the budget, and Parliament definitely scrutinizes the budget, and expenditure review is a component of that.
Senator Cools: I would like to welcome the minister here this evening.
I will give the minister a little break from expenditure review. My questions have more to do with his capacity as Minister of National Revenue. I am sure he will appreciate the little break.
I have been listening to you with some care. Your repeated theme seems to be: smarter government spending. I think you have said that this resonates with the public. I have been looking at the Main Estimates and I am a bit baffled by several things.
Some years ago, by legislation, the Canada Customs and Revenue Agency was created, for which you are responsible. Yet I am told by your website, called the Canada Revenue Agency, that the Canada Customs and Revenue Agency is no more, as of December 12, 2003. It became the Canada Revenue Agency and, obviously, a part of it has become the Canada Border Services Agency.
How was this effected and what was the thinking behind it? How can the principles of smarter government spending possibly apply to taking the Canada Border Services Agency out of Canada Customs? Since when are customs activities services? That is another point.
Could you help me? I have been struggling with it, because this has suddenly been given to us as a fait accompli. Changes to the machinery of government and the business of the organization of government and departments should be undertaken rarely, cautiously, and only after serious study. For example, in 1966, a major bill, I think it was called the government reorganization bill, came about largely as a result of the Glasgow commission on the organization of government services. I forget the exact name of the commission, but it was something like that.
I have rolled a few questions into one. I wonder if you could help me understand the thinking, the rationale behind it, and how it can possibly make for smarter government spending. I am at a loss.
Mr. McCallum: Thank you, Senator Cools, for the relief from expenditure review.
As I said to Senator Harb, I did not come prepared for examination on this matter. However, I can give you a general answer.
Also, I was not around when that change occurred. Therefore, I was not really privy to the thinking.
My understanding is that this reflected a desire to have a stronger security focus in our post-9/11 world. Thus, the customs function was lodged in the public security department. This was a part of that organization, and it would seem to make a great deal of sense to me, but I was not privy to those discussions. This predated my arrival in this position, but it would seem to be logical. It is somewhat in the spirit of, but certainly not the same as, the U.S. homeland security. It is a move in that spirit, I would say.
Senator Cools: I fail to understand how the business of excise taxes and all these duties that belong to the Minister of National Revenue, and have resided with National Revenue for quite some time, can just suddenly be switched away. I do not understand it. There is a historical, constitutional relationship that is expected between the taxer — the government — and the taxed — the population. I am bringing some levity to this here, but it is a very important relationship and not one to be tampered with easily. The machinery of government, historically, respected that. Maybe you have no thoughts on it.
Mr. McCallum: My thought is that I would not agree that it was tampered with lightly. I am sure a great deal of study went into it.
Senator Cools: Where has the study been?
Mr. McCallum: A customs function has a security role and a tax role. It is a matter of debate whether one focuses on the one or the other.
The world changed in significant ways after September 11, with the desire and a rationale for a greater focus on security and bringing together the security side of things. To me, it sounds like an entirely rational move.
Senator Cools: The term is ``border services.'' How is customs at the ports a border service?
Mr. McCallum: We are getting further and further away from my areas of jurisdiction. I would have to leave that question to the Minister of Transport or the Minister of Public Security.
Senator Cools: My understanding is that the bill has not passed yet. I asked you how all this was created when the bill has not been passed.
Mr. McCallum: That is right. I am not quite sure what the question is.
Senator Cools: I was just saying to you that the Senate has not yet received the bill. I am wondering how all of this became a fait accompli, and even reflected all the way through the estimates.
Senator Murray: It indicates the Order in Council by which the transfer is made.
Senator Cools: I am trying to get onto the record how all of this has been created. As I said before, the machinery of government is something that is undertaken slowly and assiduously. Yes, there is an Order in Council, but this is all a year old. This was all done on December 12. Thus, there is a lapse of a year between the Order in Council and the piece of legislation. I would like to know why.
The Chairman: Could I ask if you could respond to that question? I have three other senators who want to put questions.
Mr. McCallum: I will have to get back to Senator Cools. I will look into it.
Senator Day: Thank you for being here. I want to clarify two or three points in lines of questioning that were asked earlier so that I can ensure that the record is clear for us all.
We talked about the Manley $1-billion exercise of reallocation, of looking back through priorities — Senator Murray was discussing that — in 2003. That was a similar type of exercise. Was there one in 2004? The one that we have been primarily discussing here today is 2005 onward for the next five years. Between the $12 billion, which is going forward five years, and the $1 billion from a year or a year and a half ago, was there another exercise of reprioritizing in there?
Mr. McCallum: No. I would say that the Manley exercise is quite different from the one that we are conducting. First, we are talking about $12 billion over five years. Second, we are intending to make this a permanent shift in the culture of Ottawa as opposed to a one-time exercise. Third, the structure of it is driven by PCO and the clerk and his committee and the Prime Minister. There is substantially more, as I put it, artillery from the top in this one.
Senator Day: We learned from the $1-billion exercise from a year or so ago. This is a government decision to go forward with a bit more artillery involved, as you point out.
Mr. McCallum: That is a good way to put it, yes.
Senator Downe: I have a short supplementary. Was the $1 billion achieved under the Manley exercise?
Mr. McCallum: I believe it has now been achieved.
Senator Day: Just for clarification again, $10 million of that $1 billion was from CBC, and that concerns the CBC issue that was mentioned earlier this evening. I have all the figures here. I remember having an extensive discussion with Minister McCallum when he was Minister of National Defence with respect to the significant contribution by the Department of National Defence in relation to coming up with a major portion of the $1 billion. That, as we say, is an exercise of the past.
I am looking at the mandate of your subcommittee. Although we have focused on savings or reallocation or reprioritizing of funds, the mandate is also to ensure that government spending remains under control, is accountable, closely aligned with priorities of Canadians and that every tax dollar is invested with care to achieve results for Canadians. When that mandate is analysed, it is indicated as ``ensure value for money for taxpayers.''
Value for money is a review that the Auditor General gets involved in these days, and we have had some discussions with the Auditor General in relation to that particular review. Do you anticipate that your subcommittee will be doing a similar type of value-for-money exercise or ensuring that it is being done by the various departments in a similar manner to that of the Auditor General?
Mr. McCallum: As I said earlier, I am looking forward to discussing these matters with the Auditor General and determining in which areas our efforts might complement each other or converge. I do not really anticipate duplication because our efforts are designed to establish this process of continuous reallocation, shifting of expenditures from the lower to the higher priority areas, achieving changes in activities or programs to have smarter spending and greater efficiency. Her analysis is more to do with whether existing departmental spending has been done efficiently or well, whereas ours is more to do with a process of change, one could say. There are certainly some overlaps and points of mutual interest, but our focuses are different.
Mr. Sheikh: The fundamental difference between what the Auditor General does and what we are doing is that the Auditor General will take government policy as given and then examine whether or not you are achieving the best possible outcomes. In our exercise, the ERC is not constrained by a particular policy. They can change policy to achieve better results.
The Chairman: The Auditor General also has the power and authority to comment on the way that the government manages the money that it has. She has that mandate as well.
Mr. Sheikh: Of course. I was simply saying that the ERC has the mandate to change policy if it wants; the Auditor General would take existing policy and review it.
Senator Day: In part, you are anticipating my next question. There are some who express concerns that the Auditor General's value-for-money audit gets into the realm of policy discussion, debate and analysis. If you determine, minister, while having your discussions with the Auditor General, that there is some overlap, I am wondering if you might share with us the decisions and the discussions, to the extent that you are able. We have seen, since the Auditor General took on that new mandate some time ago, her department grow to 1,200 people, with a $50-million to $60- million budget per year. I am wondering if we should, a few years from now, anticipate your committee growing in a similar manner.
Mr. McCallum: We shall see.
Senator Day: I thought you were saying at first that there was a specific amount for each of the various ministers — procurement, Brison; property management, Brison; and service delivery, Volpe. I was not certain that you were saying that later on.
Mr. McCallum: My objective is to find as much as possible. The total target is $12 billion. I would like to get as much as possible from the central functions, and then whatever is left, the residual, we must get from the departments.
Senator Day: The 5 per cent.
Mr. McCallum: Right. It just turns out, having read the analysis and almost all of the work having been done, that our estimate of the savings that will actually be yielded by these initiatives amounts to $6 billion.
Just by chance, that is half of 12, but had the savings been $7 billion from the central initiative, we would only have needed $5 billion from the departments.
Senator Day: Is it fine-tuning to say you want $2 billion from each of those activities?
Mr. McCallum: We did not have targets for each of those activities, but I think our estimates would be in the order of $3 billion for procurement, $1 billion for property management and $2 billion for service delivery, in very round numbers; is that right?
Mr. Sheikh: Those are the preliminary numbers, and of course the review is ongoing. At the end of all that, once you have taken into account a variety of factors, the numbers will land wherever they do, but roughly, those are the kinds of estimates that we have seen so far. To directly answer your question, there are no targets for any one of the areas. There is just a question of what you can do in that area and how much that would give you.
Senator Day: I think the minister's answer explains the numbers I wrote down earlier. The final point of clarification is you said 5 per cent, and then you said it may not be 5 per cent, that within areas we were looking at, it might be higher or lower in certain departments.
My concern is that certain departments are easier targets than others, and that certain targets may be required to contribute a significantly higher figure than others, as happened with the Manley exercise. Have you built in anything to guard against that?
Mr. McCallum: We have a strongly developed sense of fairness, I would say. If a department is deliberately unconstructive — I am not saying any one is — but if one were to be, we would not want that department thereby to escape. I think we have a keen sense of fairness and a keen sense of when a particular department is being super- constructive or the converse. It is important that this point be understood. I hope I have been clear. The 5 per cent is identical for each department in terms of what they are each asked to put on the table. At the end of the day, the decisions may be highly unequal, not 5 per cent — not the same at all — because the last thing we want is, across the board, the same, because I think that kind of behaviour is a recipe for mediocrity. We want to make strategic choices based on these criteria and much discussion. If your question is, will it be fair, we are certainly making every effort to be fair and to come to the best public policy decisions, or I should say recommendations, really, because my committee is recommending to the Prime Minister.
The Chairman: Through the Treasury Board?
Mr. McCallum: Yes. To clarify, I have said the precise modality of delivery is undetermined.
The Chairman: Is it a work in progress?
Mr. McCallum: Yes.
Senator Ringuette: I understand that it is a work in progress and so forth. However, in answering questions of Senator Day, you prompted a few questions in my mind. Who set the $12-billion target? How was that set? You just said that if, through procurement, service delivery and the third one, we manage to find cost-saving efficiencies of $6 billion or more, the 5 per cent for the departments might be reduced. From my perspective, if you look at savings and efficiencies, the bottom-line number, and you manage to identify efficiencies worth more than $6 billion in those three spheres, if you manage to identify $10 billion, bravo. I do not understand this magic number of $12 billion in relation to your objective of being smarter and more efficient.
Mr. McCallum: That is an excellent question. I think the history of it is that we had a commitment for $3 billion per year within four years in the last budget. In the Liberal platform in the last election, there were certain commitments made, in terms of expenditures for health care, child care, cities, communities and so on, and then there were certain assumptions made about funding available. It was calculated by those who created the platform that we would need to find $12 billion over five years in order to fund our election commitments. That is how we came to the $12 billion, which was very consistent with the $3 billion in the budget because $12 billion over five years translates into $3 billion per year after three or four years. That is why the $12 billion. It is the money we needed to find to finance our election promises.
The second answer to your question is I think it is important to have a target. It was a logical way to derive the target, through the delivery of our platform, but it is always good to have a target. If you do not have a target, then I am not sure you achieve as much. I think $12 billion was a logical calculation, and having a target gives you the incentive or the necessity to get the job done. The last thing is that if we found $15 billion or $18 billion or $27 billion in sensible savings that we could achieve over five years, and reallocate all of that to higher priority areas, I would say, go for it. I have nothing against being over $12 billion but I have everything against being under that. Our goal, to which we are totally committed, is to find $12 billion or more over five years.
Senator Downe: To follow up on that last question, my understanding is that $12 billion, and correct me if I am wrong, was, in effect, pulled out of thin air, if I can be flippant, because the projection was there would be a $43-billion surplus over the next five years, the time frame you are talking about. You add $12 billion to that and the total cost of funding the election commitments was $55 billion. Now, everyone in the room knows that the projected surplus numbers are low. They have been artificially low for years. If the $43-billion surplus becomes $55 billion, and your exercise finds that the $12 billion to be reallocated will have a serious impact on service delivery for Canadians, particularly in the regions, I would assume your recommendations to cabinet would be, first, we no longer need the $12 billion because we have the funds from our surplus and, second, this would have too much impact on average Canadians and we recommend you not proceed. Would that be correct?
Mr. McCallum: If all those ifs that you used were right, then you might have a point, but certainly the number was not plucked out of thin air. It was based on the-then existing estimates of the surpluses, plus the estimate of the cost of our election commitments; that is what gave us the $12 billion. Now, as to whether the actions that we are contemplating will have a serious impact on service delivery, I think they will, but it will be a positive impact. The service delivery initiative, the procurement, those are improvements in service delivery.
The other point is you are looking at just one side of the coin. There is $12 billion over five years in savings, but you cannot just look at that. You have to look at the $12 billion of additional spending on the high priority areas that we get as a consequence of this exercise.
If all of your ``ifs'' were correct and if this exercise were to do terrible damage to Canadians, then of course we would not want to do it any more. However, it is my firm belief this is not the case, that this is the right thing to do. It is an idea whose time has come. We will deliver services more efficiently and more cost effectively, and we will be demonstrating appropriate stewardship of taxpayers' money. In a few years from now people will be as wedded to annual expenditure review to get every bit of use from the taxpayers' money as they are today wedded to not going back into deficit.
Senator Downe: I noticed you use a couple of ``ifs'' there yourself, minister.
This refers to the comments the chair made earlier. The question can be framed as reallocation and rearranging from what you call low priorities to high priorities. The question those from the regions always ask is whose low priorities and whose high priorities? Are these Ottawa's low priorities that are high priorities in the regions? We are always concerned about that. In your previous life you were pounding the drums for underestimating the surplus, so I know you share that from your ministerial experience.
It seems to me that part of the debate, and where parliamentarians are being kept out of it, is how do we spend the surplus? Paying down debt, reducing taxes, reallocation, are all legitimate debates that are being avoided because the surplus has been underestimated for the last number of years.
I heard what you said about the $12 billion, but I hope it is not cast in stone because we may have a lot more money than we need in this program. Even though best efforts were made in the mid-1990s in program review, there were still impacts. I spoke earlier tonight about the Manley review, where there was $10 million, I believe, taken out of the CBC; that trickles down now to the regions. There will be impacts and I hope you would continue to be conscious of those.
Senator Mahovlich: You mentioned property management and talked about a target. I agree that you have to have a target, but in the Senate our antennas go up because we want to know what is happening when anybody is thinking outside the box.
Minister Brison is saying that he will sell all the properties in order to get his $3 billion or $4 billion. I think that is questionable. Government property is in use, I would think, or is it mismanaged? I am not quite sure. I do not know. However, if it is mismanagement, we could hire property managers. What are your thoughts on that?
Mr. McCallum: I can clear that up easily. Let me say that not one penny of the savings out of property management will come from selling buildings. I am an economist and I know it is bad policy to sell off the Crown jewels to buy your groceries. You do not want to sell off all these assets and then credit your budget with that money when it is only one- time money.
The decision on whether or not to sell the buildings will not be taken for at least a year. Any savings that are credited to my exercise and the $12 billion are savings from more efficient management of property that we continue to own. For example, enforcing the current rules on how many square feet or square meters per employee would be one source of savings, and there are other ways in which the properties we currently own or lease could be better managed. Those are the sources of the savings.
We may or may not sell the buildings. A decision on that is quite a long way off. It does not have to do with the savings that I am planning to generate.
The Chairman: If in fact you were to start enforcing the rules on the amount of space per employee, and you found that the space employed now is too large and you were able to save a buildings' worth, would you sell that building?
Mr. McCallum: Or reallocate it to other users. I imagine if the building turned out to be surplus we would perhaps sell it. That would be up to the Department of Public Works, or perhaps we would lease fewer buildings than we do currently. We certainly would not want to hold on to more buildings than we need.
The Chairman: Can you give us a more specific example? There are three key areas you said you are looking into. One is procurement, one is property management and the third is service delivery. You gave an example of prices for file folders from 59 cents to 19 cents. Can you be more specific in terms of property management?
You told Senator Mahovlich that in terms of property management, the allocation of space might be done more efficiently and wisely. What other specific examples do you have of property management efficiency and savings?
Mr. McCallum: I will ask Mr. Sheikh to elaborate. I have given you my understanding of the essence of it.
Mr. Sheikh: There are four elements of potential savings in the property management area. One of those potential sources is the sale of properties, which the minister has said will take quite some time, so that is not on the table for now.
The remaining three sources are: one, enforcing standards on space use; second, enforcing our standard on changes to fit-up costs. If you have a space that you want to convert into exactly the kind of space you need for a civil servant —
The Chairman: Are you talking about leasehold improvements?
Mr. Sheikh: I am not sure. I am talking about when an employee leaves and that space becomes available and you hire a different employee. For example, if the person who leaves is an EX-5 and the person coming in is an EX-2, there is a difference in the standards for the office that you need. The standards we have now would be enforced.
The Chairman: I understand.
Mr. Sheikh: The third is outsourcing. If the Department of Public Works finds that the private sector can, for example, provide some services on property management that are cheaper than what the government can provide, then they will buy those services.
The Chairman: What types of property management services might be cheaper? Give me an example.
Mr. Sheikh: An example is the kinds of things that one would need to maintain buildings; the private sector could maintain those buildings for us.
Senator Cools: You can sell off the RCMP.
Senator Ringuette: With all the discussion tonight, I realized that we will be looking at mega-procurement, and suddenly NAFTA came to my mind. Within NAFTA, the federal government, and provincial governments too, I think, are tied into the procurement situation. If the value is over $25,000, I think, it is opened up to NAFTA partners.
In regards to the small, medium and larger Canadian companies doing business with the federal government, and paying taxes to the federal government, the mega-procurement scenario in NAFTA is beginning to be another concern of mine — a red flag.
Mr. McCallum: I would like to refer this to Mr. Sheikh. It is not an issue on which I am an expert. I would guess that procurement on the scale that we already have today would subject us to the same NAFTA rules. Perhaps Mr. Sheikh knows more about that.
Mr. Sheikh: I will tell you what I have heard from Public Works. You may want to hear more information from Mr. Brison when he comes here. The Public Works argument is that there are 40 or 50 commodities that they concentrate upon. They are not really focusing on small purchases. It is not a question of a department buying some small amount from a local purchaser. They are looking at big purchases and there are two sources of savings compared to what we have now.
First, Public Works uses standing offers at this time. They negotiate a price that is available to all government departments. A number of departments are not using those standing offers. Basically, it is not a question of doing anything new; it is a question of enforcing the requirement to buy from standing offers.
The second part is that right now, Public Works might buy 200 computers for one department; 300 for another department. They are all above $25,000. Public Works would like to combine all of these requests from different departments and negotiate a much better price with the supplier.
NAFTA issues, to the extent that they are relevant, are relevant today. Since these demands will be much greater than $25,000, they are now and they will be in the future. The new NAFTA issues do not come into the picture.
The Chairman: Minister and Mr. Sheikh, thank you both very much for coming tonight and speaking to us about the Expenditure Review Committee. We learned a lot. We still have a number of questions and we hope that in the New Year you will be able to come back and update us on this new system that is really a work in progress.
Honourable senators, this brings to an end this meeting. After the gavel is hit, I would ask that you stay for two minutes to pass the budget. Again, minister, thank you very much. We appreciated your coming here this evening.
Senator Cools: We discussed this in committee some weeks ago, including some money for more help and support for the committee. Had we not discussed this briefly?
Senator Day: The $16,900?
The Chairman: We have two people from the Library of Parliament as researchers and assistants here now.
Senator Cools: At some point, we said that we should try, because going through these estimates is no simple matter. Someone said that the Senate has tons of staff, various staff, for senators. If you look at the Law Clerk's department, there are two people working there. I thought we had some discussion of putting a number in here under which we may be able to retain, for example, a chartered accountant or someone like that on occasion. It is not reflected here but we had a discussion about that.
The Chairman: I remember that.
Senator Cools: We could put in a number whereby we could retain help. When we say ``professional and other services,'' it really does not include that number. Maybe we should put in an item whereby we will be able to hire some professional help.
For example, about three years ago, I believe that the Legal and Constitutional Affairs Committee started to hire more legal assistants. I do not see why we cannot begin to hire a little more financial assistance, or whatever, as needed. Maybe we could just put in another item. Choose a number.
Senator Ringuette: On that same question, I am relatively new at the Finance Committee. I find that we are being very well served by the permanent employees of the Library of Parliament. Maybe if we moved into a specific subject, value added or something, where there was a strong focus as an item of discussion, that would be an option, but I do not know.
Senator Murray: I do not have any objection at all to Senator Cools' suggestion, but I do not think that the way to handle is it to pick a number out of the air and put it in there for ``consultants.'' What happens here is that you, Mr. Chairman, will have to take this budget to Internal Economy. You are probably working against a deadline. When you go there, if you put another item, whatever it is, they will want to know what it is for. As a matter of fact, when you put it in there you have to indicate the per-diem rate you will be paying and for what service, et cetera.
The point is that we could let this go now, give it some more study, and you could warn them when you go there that you may be back for a supplementary.
Senator Cools: It is no simple matter to go back before the committee. This is done at the outset and it is pretty routine. One could have an idea of hourly rates for these people. I am borrowing from the concept that some years ago, the Legal Committee realized that they had very little legal help and they put in a number. I did not know this was coming up today; otherwise, I could have looked up the record to see.
Senator Murray: This committee, when we were doing the study that Senator Rompkey wanted us to do, on the Goose Bay, went outside and hired someone. I had to go and put in an estimate for it and explain how much we were paying.
Senator Cools: Yes, but that was under the guise of a special study. That is not the instance here. We are not talking about a special study here. We are talking about sometimes making available to the committee specialized financial assistance in terms of these estimates. This is what we are talking about. In other words, a routine cost to be able to make available more assistance to the committee. That was how our discussions had taken place previously. I would see it the other way around. We could include a number, and if we need more, we can go back and ask for more. Any time there is a special study, you have to go and ask for money. We are talking in the context of what I would consider to be routine functions. I do not think there should be too much problem. This committee is dirt cheap. This committee does not travel, it does not move.
Senator Day: It has not.
Senator Cools: This is very minor. This budget could be increased by $10,000 or $15,000 and it would not even be a blink.
The Chairman: Senator Cools, you make a great point. The fiscal year ends in March. Senator Murray has suggested that we proceed with the budget before us now. I would like to take up the issue that you have raised with the steering committee, analyze it there and come back to this full committee with some recommendations on how we would like to deal with it.
Senator Cools: This will be gone, this will be done. This is a one-way trip, just remember. This is a one-way trip.
The Chairman: I understand what you say, but —
Senator Cools: Why do we not put in, say, ``financial advice''? You have ``communications consultant''; no one is questioning that $10,000, so we can easily put in $10,000 for financial consultants.
Senator Murray: You will go through that quickly if you are hiring CAs.
Senator Cools: When we studied the GST, at one point when the committee was getting off the ground, I remember that it hired one of the chartered accounting firms to work with us. If Senator Murray thinks $10,000 is too little, that we would go through it quickly, we could say $20,000. This is just nuts and bolts. This is day-to-day routine, and when we go in with this number, they expect it to carry us through till March. You cannot really say that you can go back between now and March because these go in from every committee, and then this is what the committees suggests or recommends; this is roughly the plan.
If you want to do a special study thereafter, then you can go back on the grounds that we have a special committee, especially if the references come from the chamber or whatever; but this budget is so bare bones as to be beyond parsimonious.
I do a fair amount of work and a fair amount of reading, and the staff who work here get more professional assistance than senators do. They have professional development days and all kinds of things going on for them all the time; but if we need some help working through any of these documents and trying to ascertain any one of those one- line points, which could easily take hours and days, we can get very little help. I am just saying to put in a number.
The Chairman: Senator Cools, you have made a good point. I undertake to take it up and argue strenuously for something like this in the steering committee. We will thoroughly discuss it there and come back at an early date to this committee to report.
Senator Cools: Why do you have to go to the steering committee when you have the support here to move ahead now?
The Chairman: I want to do some research. I do not know what Legal Affairs has done. I do not know whom they hired, what they paid, how it was set up. I would like to study that.
Senator Cools: I sat through those discussions. They just put in a number for legal advice. That is how it was.
Senator Murray: What is your deadline? When do you have to go to Internal Economy?
The Chairman: Monday.
Senator Cools: We can agree on this and it can be done.
Senator Murray: You can still put them off for a couple days and your steering committee will be back; we are meeting next week, are we not?
The Chairman: Yes.
Senator Day: Do not count on putting off Internal Economy.
Senator Cools: I would not put off Internal Economy. This can be ready for Monday. There is no one here who is opposed in spirit to including some money. If the money is not used, it can just go back to Internal Economy. I do not think anyone here is opposed to a quantum being put in.
The Chairman: Senator Downe, you are on the steering committee. Do you have any comments?
Senator Downe: I am new here, but I share some of the views of Senator Cools, in that the committee was certainly frugal under the previous chair, and is under this chair. Additional funding does not have to be spent. We could put it in under ``financial adviser,'' ``financial assistance'' or whatever.
Senator Cools did not say this, but she alluded to the training for the staff who are assigned to the committee, and it might be helpful if, before presentations, we had some overviews and briefings as well so our questions are more pointed, rather than fact finding, and maybe the funding could do that.
I will summarize my view. The Senate does a terrible job of promoting itself. They are modest beyond belief. The best work is done in committees. Committees should be funded 500 times what they are so we can travel the country and do other things. I am in favour of spending more money in committees; it helps the institution and helps us do our job better.
Senator Day: The communications consultant was connected to part of your comment. That was the reason we put that in here, so that we can start getting our chair in The Globe and Mail periodically.
Senator Downe: That is to hire the photographer.
Senator Day: I have seen other committees put in a per diem for a consultant; they say 15 days at $2,000 a day, that kind of thing. I know that is what National Defence does, and I have seen it in a couple of other committees; so I think just to pick a number out of the air is not very helpful.
Senator Cools: You can pick a final number out of the air in terms of what is reasonable to ask.
The Chairman: Can we not pass this budget as is, with an instruction to the steering committee that before this document goes to Internal Economy, that committee must sit down to deliberate and put in a figure for a financial consultant, as suggested by Senator Cools and supported by Senator Downe?
Senator Downe: It is only four months until the end of the fiscal year.
Senator Day: Can we put it under that item 2, ``communication consultant and financial consultant,'' or ``communications and financial consultant''?
Senator Cools: I would put it as a different item, number 3. I would even put in 3, a financial consultant, and put in $15,000 or $20,000 or whatever.
The Chairman: Senator Cools has moved that this committee amend this draft budget to include a line item called ``financial consultant'' for $15,000. Is that agreed?
Senator Day: If you put in one line, you have flexibility; if you put in two, you cannot move the money from one to the other.
Senator Cools: That is true.
The Chairman: What do you suggest?
Senator Day: The way you suggested earlier; line 2, communications and financial consultant.
The Chairman: She later said it would be good to have it as a separate line item.
Senator Cools: We can put it in there in line 2; communications and —
The Chairman: They are separate ones, though.
Senator Cools: What you are saying is you can move the money around between the two, so you have a bit more freedom. We can put it in there for a bit more freedom. Communications —
Senator Murray: We talk all the time about transparency within the government. If you want $10,000 for communications, put down $10,000 for that; and if it is $15,000 for some kind of financial consultant, put that down.
Senator Cools: Let us put in $15,000 for a financial consultant. He is the government; he was making a suggestion.
The Chairman: The motion before the committee, made by Senator Cools, is that the budget be amended by having a new line for ``financial consultant,'' $15,000. All those in favour of the question signify by raising their hands.
All those contrary.
Senator Day: Did anyone vote?
Senator Downe: I cannot vote because I do not know what the cost would be.
Senator Day: I do not have enough information to vote.
Senator Downe: I think the concept is good.
Senator Mahovlich: It seems we have never spent the amount we have asked for in this committee.
Senator Day: We spent $327 last year.
Senator Murray: Too much on the meals.
Senator Mahovlich: I do not know why we do not have roast beef here.
The Chairman: May I have a motion? It is ten after nine and I am in the hands of the committee.
Senator Cools: All the time you just hear, is it agreed, is it agreed?
The Chairman: I am in the hands of the committee. What would the committee wish to do with the budget?
Senator Day: Do we need a financial consultant in this budget?
Senator Cools: If you do not think this committee needs some support, and that members of these committees, new members, need some assistance —
Senator Day: We cannot get that from our current library?
Senator Cools: No, you cannot get it from the library. We bring new members in here and throw them into a process, with very little support, very little assistance. There are some people who are not bothered because they do not do a lot of work anyway, but for the most part, to my mind, in this entire system of Parliament, members and senators are the least supported of all the parties. The ministers come with their thousands of lawyers, because I have challenged a lot of them. They just walk in and hand whatever I said to three or four of their lawyers and someone churns out something overnight. In fact, senators and members of Parliament are the least assisted of all the people in the system. I have been around for a while. I just do not think it is fair to members of Parliament. We are not talking mega-dollars here. Look at the contrast. A few minutes ago we were talking about $180 billion, and $40 billion for this and $9 billion for that. We are talking here about a few measly dollars, and some of us have thoughts. I was just looking at this. Even the ministers' allowance for a car and driver exceeds anything that we are talking about.
Senator Day: That is no reason to spend money. We should be hammering them.
Senator Cools: It is hard to take people seriously. I was the vice-chairman of this committee for a long time and had to struggle to get a lot of bills through with very little help or assistance. This committee barely eased along, barely moved along. It was close to not functioning — and you know it, too — on many occasions. I am just saying begin the practice of putting some money in there that can support members. Most members of Parliament, and the average senator, vote on these estimates daily without even knowing what is in them, and sometimes I feel wrapped in shame that we are passing these billions of dollars and nobody knows. It bothers me deeply. All I keep saying is that we need to get the senators the assistance that they need. Ten thousand dollars is such a small amount of money.
Senator Day: Senators Cools make several good points, but I just feel that what she speaks about requires more investigation. We have to know what services we need and that we are lacking. It would be very easy to agree with her and say ``Stick in $15 000,'' but I just cannot do that. I cannot agree with that.
Senator Cools: You see, Senator Day, now you are starting to speak as a member of government, but the opposition members here do not have the resources that you have at your disposal. I did your job. You can phone the Treasury Board person and say, ``What does this mean?''
Senator Day: You could call him, too. If he cannot do it he will find someone who can.
Senator Cools: He does not have those answers.
The Chairman: Senator Day moved a motion some time ago to adopt this report and I will put the question once again. All in favour of the adoption of the budget as presented raise their right hand.
Contrary minded? Abstentions? Motion carried.
The committee adjourned.