NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 31, 1998

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[English]

The Chairman (Mr. Robert Bertrand (Pontiac—Gatineau—Labelle, Lib.)): Good afternoon, colleagues. Welcome to the afternoon session.

This afternoon we have Mr. Alain Jolicoeur with us. He is the chief human resources officer.

[Translation]

Mr. Jolicoeur, I assume you intended to make a statement. We normally allow 15 to 20 minutes for a presentation and then move on to questions from the members.

I would first ask you to introduce the people with you.

Mr. Alain Jolicoeur (Chief Human Resources Officer, Treasury Board Secretariat): With me is Mr. Tony Rizzotto, who is responsible for excluded groups and compensation for the Royal Canadian Mounted Police and National Defense, and Mr. Fernand Lamarche, who is responsible for all National Joint Council policies.

[English]

Mr. Chair and members of the committee, I wish to thank you for providing us with this opportunity to appear before you today. I would like first to assure you that I do not intend to repeat presentations that were made here before—for instance, that made by Colonel Lemay—but I will refer to a few important points that were raised during his presentation.

Similar to the authority conferred on the Treasury Board by the Financial Administration Act with regard to the public service, the National Defence Act authorizes the ministers of the Treasury Board to make regulations prescribing the rates and conditions of pay and allowances for the Canadian Forces.

One of the underlying principles of government policy is that Canadian Forces compensation should be comparable to that of the public service, but with the flexibility to address unique military requirements. The report of the Auditor General to the House of Commons in 1990 included a chapter on human resource management called “Military Conditions of Service”. It was chapter 21. The report, among other things, called for the review and modification as appropriate of the framework for managing military conditions of service, including the development of clearly defined TBS and DND roles and responsibilities.

As previously stated, the responsibility for advising the Treasury Board on pay and certain conditions of service is shared by National Defence and the Treasury Board Secretariat.

In 1968 terms of reference were established for a DND and TBS advisory group on military pay and conditions of service. This group, which is now called the joint TBS and DND advisory group on military compensation, meets on a regular basis and is responsible for advising the Treasury Board on rates of pay and allowances, the relationship between the rates of pay and allowances in the Canadian Forces and those in the civilian sector, and pay structure.

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The Auditor General's report further recommended a broad-based review of the policies, systems, and methods used to establish pay and other conditions of service. This review would be related to the personnel management objectives of the Canadian Forces, based on a longer-term force structure plan, and would deal with issues such as attraction and retention, maintenance of internal relativity, and offsetting the disadvantages of military service.

In his March 24 address to this committee, Colonel Lemay highlighted the work undertaken by the advisory group to develop pay comparability methodologies. In an effort to address the issue of comparability for pay purposes, a revised compensation determination framework was developed and a four-year phased implementation was begun in 1997.

This framework included a four-year expenditure schedule which will restore wage comparability between the Canadian Forces and the public service between April 1, 1997, and October 1, 2000, through semi-annual wage increases. The first instalment of the wage comparability schedule was approved effective April 1, 1997. As well, approval in principle was received for a compensation expenditure plan for 1997-98.

Since approval of the framework we have received subsequent approvals from the Treasury Board with respect to spousal employment assistance, reserve force retiring gratuity, home travel leave, new reservist pay rates, premium in lieu of vacation leave at 6% and designated holidays at 3% for reservists, and some accommodation assistance allowance for class B reservists.

In addition, Treasury Board also approved the following: the second and third instalments of the wage comparability schedule, effective October 1, 1997, and April 1, 1998, and economic increases of 2%, the first one for April 1, 1997, and a similar one for April 1, 1998.

With the implementation of the above initiative, we're confident that we are having a positive effect in dealing with the very real compensation and benefits issues facing members of the Canadian Forces. We believe these initiatives demonstrate the government's commitment to seeing Canadian Forces personnel receive the kind of pay and benefits which will improve the quality of life for them and their families. These issues are important not only to us, but to all Canadians.

[Translation]

The Minister of Defense issued a press release last Friday that put military salary increases for the next two years into perspective. It indicated that during this period the increases would be of 9.3 per cent for soldiers and 9.4 per cent for officers. These increases take into account both relativity and economic increases.

I would like to deal briefly with two other issues. The first is the issue of Child Care Assistance. The Department and the Secretariat have been working closely together for some time on the issue of Child Care Assistance for members of the Canadian Forces. We have reached agreement on the eligibility criteria and are presently discussing options related to the conditions under which it should be paid and its duration.

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The other point I would like to bring up is related to housing. The Secretariat has collaborated closely with DND in the work related to setting up the Canadian Forces Housing Agency, and is looking forward to its continuing involvement in that file. We are willing to provide the necessary assistance to DND in its work on the rationalization of housing stock and the development of a housing policy and program. As well, we are willing to explore with DND the possibility of developing compensation mechanisms related to housing.

In closing, Mr. Chairman and members of the committee, on behalf of the Treasury Board Secretariat I can assure you of our ongoing commitment to addressing the compensation challenges facing the Canadian Forces. The accomplishments to date are only the beginning.

Speaking for my colleagues, I would like to thank you for the opportunity to speak to you and we would be pleased to answer any questions you may have.

The Chairman: Thank you. We will now move on to the question period.

[English]

Mr. Hanger.

Mr. Art Hanger (Calgary Northeast, Ref.): Thank you, and thank you for your presentation, gentlemen.

I assume that the statement rendered this afternoon was in direct relationship to the request by the minister to review the whole pay structure. Is that correct, or is it part of an ongoing review that goes much further than that?

Mr. Alain Jolicoeur: I'm not sure I understood the question, but the proposal and the announcement that have been at this point are part of an overall strategy.

Mr. Art Hanger: As a matter of interest, in the most recent pay increase what would a master corporal receive more to his pay?

Mr. Tony Rizzotto (Acting Director, Executive and Excluded Groups Compensation, Treasury Board Secretariat): You're asking about the most recent increase, that of April 1, 1998?

Mr. Art Hanger: Yes.

Mr. Tony Rizzotto: A master corporal would be receiving 1.2% more for comparability, an economic adjustment of another 2%, and then all environmental allowances would go up by another 1.8%. So generally it will probably be around 4% as of tomorrow.

Mr. Art Hanger: How much more will that differ on his paycheque?

Mr. Tony Rizzotto: Dollar-wise?

Mr. Art Hanger: Dollar-wise, yes.

Mr. Tony Rizzotto: I can't tell you what the exact dollar amount is.

Mr. Art Hanger: The reason I asked that is I've talked to a master corporal, not directly but through one of my associates, and he will see an increase of about $100 gross pay per month, but after taxes, after the increase in the premiums on EI and the CPP deductions, he will net somewhere around $53 per month. That's with all these other things kicking in.

I understand too that at the same time National Defence has ordered an increase in the rents to DND personnel. He sits back and he looks at his paycheque and he feels that there's going to be another loss of about $30 per month and that increase will net out somewhere around $23 to $25.

A lot of it has just been clawed back, in other words. So really is he any further ahead with this increase, given the fact that you have all these payroll deductions coming off?

I would have assumed that since you're sitting back and analysing the whole pay structure you would see what it's going to net out before you would even make the announcement.

Mr. Alain Jolicoeur: Obviously I couldn't tell you for every level, but what I can tell you in the context of the amount of money available for personal cost increase is that for a period of two years for the Treasury Board to approve increases that are beyond 9% compares very well with any other increase in the public service or otherwise. I know we're starting from a position that required adjustment and this is why the decision was to go about twice as far as it has gone for other groups.

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Mr. Art Hanger: I can appreciate the fact that they're substantially behind anyone else, and I've always had a bit of a problem as to why the military are tied to the public service when they're so different. There's such a difference in their organzation, their requirements and demands, and yet I know this is the benchmark that is used. I believe even in the minister's press release it clearly stated that they had fallen somewhere in the neighbourhood of 14% behind because their wages had been frozen and that their loss is substantial just due to other clawbacks in the system.

Sure there's going to be an increase, but I'm wondering how everyone has taken into account those increased clawbacks besides, which are much more substantial than the pay increase. I'm beginning to wonder why there isn't some sort of consideration given to tax breaks to the military, since even their benefits are clawed back. I'm wondering, sir, if you could explain, or even comment on whether that issue was discussed during the time of your review.

Mr. Alain Jolicoeur: I don't think the tax implication or tax change opportunity were included in the analysis. It was strictly an analysis of the compensation from the salary perspective.

You made quite a few points. One of them is the linkages with the public service, and that is the current policy and it's one way of looking at remuneraton. You made the point that the military were further behind than the public service and—so I understood—there was a little bit of a problem with regard to the period of freeze, because when the freeze occurred the adjustment had not been made.

Mr. Art Hanger: That's right.

Mr. Alain Jolicoeur: So that occurred as per the Public Service Compensation Act. They were frozen. The strategy here is to re-establish that balance without at this point putting into question the policy of the comparability between the public service and the military. That remains the main policy and the main strategy.

What we are seeing now is an adjustment and a larger portion of the compensation envelope going to the military to bridge that gap at this point, to correct that situation.

Mr. Art Hanger: But with the housing conditions the way they are, for instance, as one example, why would rents be increased right at the same time—for those conditions they are living in—that they're getting a pay increase that really is going to be clawed back? Why would they do that?

Mr. Alain Jolicoeur: You select one specific allowance and I'll ask Fernand Lamarche to address that.

I agree with you that it's very difficult to take any one element in isolation from the others. When we compare the salary of the public service with the military, there is this other universe of allowances of all kinds that apply in one universe and not in the other.

You've raised a specific point about housing, so I'll ask Fernand to address that.

Mr. Fernand Lamarche (Human Resources Executive, Treasury Board Secretariat): When we set up the housing agency, the idea was to try to bring it to compare with comparable markets across Canada, because you have members who are in crown housing and you have other members who live on local markets. The crown subsidies, or the structure.... In the example you were giving, you said the rent has increased by $30.

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There are a number of discounts that are filtered through when the member lives in crown housing. You may have a situation of job-imposed occupancy that gives him a discount of 25%. There is a factor of the housing condition that may impact on the rent being charged. There are situations where the size isn't suitable. The family may be either too big or too small and the accommodation may not fit the exact pattern of standards that have been approved for Canadians across Canada. There are also situations where if the rent is beyond 25% of the family income—and I'm talking family income, not the member's income—they can ask for and obtain relief on the rental structure.

So you have that type of embodiment there to try to protect the members to the extent possible. At the same time, the housing authorities are trying to dissociate rent and the management of housing per se, as real property management and compensation through AAA, for example, or other allowances, to make sure everybody is being treated on the same footing. It's been a bone of contention with crown housing in the past, and structures are being put in place to try to meet these needs and address the difficulties experienced with that.

Mr. Art Hanger: Are all these—

The Chairman: Thank you, Mr. Hanger.

[Translation]

Mr. Lebel.

Mr. Ghislain Lebel (Chambly, BQ): Mr. Jolicoeur, are we not making a mistake when we try to compare a soldier with a staff member in the Public Service? The soldier is on duty 24 hours a day, his boss sends him wherever he wants him and makes him dress as he wants. Aren't we on the wrong track? As we saw yesterday, we ask the soldier to combined five or six different fields of work.

As a starting point, could you tell us what the salary of an ordinary soldier or corporal is?

[English]

Mr. Tony Rizzotto: I think the average salary of a corporal is somewhere around $36,000 or $37,000, if I remember correctly.

[Translation]

Mr. Ghislain Lebel: Yes, but what is the salary of simple soldier, a private?

[English]

Mr. Tony Rizzotto: A private is probably down in the mid-twenties somewhere. We have the actual numbers right here.

[Translation]

Mrs. Pierrette Venne (Saint-Bruno—Saint-Hubert, BQ): We had them the other day.

[English]

Mr. Tony Rizzotto: A corporal's basic standard rate after March 1998 is about $3,000 per month, so it's about $36,000 per year. A private's basic rate is about $2,000 per month—anywhere from $1,400 to $2,300 per month.

[Translation]

Mr. Ghislain Lebel: Those are not exorbitant salaries for qualified people who have responsibilities. What do you think of the policies we are finding? In my mind, and according to many people I have spoken to, the military person who joins up is entering a calling. He agrees to not count the hours and to not claim overtime pay.

On the other hand, the State agrees to take him in hand and feed him. Until recently, he was housed and fed. But a new trend is emerging. As my colleague was saying, we have decided to give $100 a month more, but ask a soldier on the Trenton base to spend $250 to $300 more each month for his food. Is that the current policy? Is the Treasury Board proposing to collect three times more in one hand than it is giving with the other? That's what's going on now, whether it's for food or for clothing.

I would like to add another element to my question, and it is about child care. Military women have told us that they have problems because they have to work different shifts and there is no child care available in the evenings or at night. In their environment, they simply have no right to it. How can you establish a child care policy if the centers don't exist? Could you clarify that?

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Mr. Alain Jolicoeur: I would like to deal with a few of the points you have raised and I will ask my colleagues to add to my statements.

Mr. Ghislain Lebel: Could you please start with the increases, the food and the child care.

Mr. Alain Jolicoeur: Agreed. Unfortunately, I am not familiar with the policy on Child Care Allowance, but I know the Secretariat and the Department are currently working on this issue in order to help military personnel who have to move and who have small children. However, this policy only applies to single-parent families.

As for comparability with the public sector, I agree that the differences you have mentioned are very important elements that we have to take into account in trying to align the compensation structure for the military with that of the Public Service. These elements are critical when it is time to establish with what group and level comparisons can be made. We also have to take into account factors such as the special allowances that may apply on either side.

Finally, I come to an important point you raised, which is the impact of one measure or another and the combination of changes that the military must face, including a changed policy on the cost of food and housing that we discussed earlier. I would like to ask one of my colleagues to give you some details.

Mr. Fernand Lamarche: I can answer some of your questions. We always try to establish fair comparisons and to have an overall view. For example, some military personnel will decide to buy housing in the communities where they settle. An equity program known as HEAP has been set up solely for the military and the RCMP because they function within similar parameters. Some programs, including that one, do not apply to other members of the Public Service. We therefore try to compensate the military and to recognize that they sometimes have to say: "Yes captain, I am moving. That's it." They have to settle elsewhere and to some extent we can protect them. Unlike ordinary Canadians, who can protect their investment and wait for the real estate market to be up before reselling their house, the military person can't wait for the right time.

We are studying all the programs and are trying to strike a balance so that military personnel will not be disadvantaged compared to others. It also happens that in many cases they have an advantage because working conditions are not the same.

Mr. Ghislain Lebel: Since we are asking him to foot a considerable bill, the military person is wondering when we are going to start requiring him to pay for his own bullets and bring his own gun when he joins the army. It's a little like police officers in the Dominican Republic that buy a uniform and therefore become cops. Is that what we are going towards? It's becoming serious. I wish you had been with the members of the committee yesterday in particular. It was not funny.

We are all proud of announcing a new policy whereby the military will get an extra $100 a month. On the other hand, we are perhaps thinking of increasing their rent. Honestly, we haven't talked about it, but we expect an increase. But we know we have to expect an increase of $200 to $250 a month for food, which means an increase of $2400 per year. They have about $1200 left in their pockets that we will go and get in food or housing costs. That's twice the increase they got. The more time goes on, the more we penalize them. The stone isn't bleeding very much anymore; it's getting dry. I wanted to bring that to your attention.

Mr. Alain Jolicoeur: Perhaps we could add something about comparability.

[English]

Mr. Tony Rizzotto: In the 1990 chapter of the Auditor General's report on military pay and benefits, etc., we were asked to look at the issue of who we should actually compare the military to. During the four-year review done between 1992 and 1996, which involved members of National Defence and my department, we looked at this issue to decide whether we could legitimately compare the military here in Canada to the U.S. Air Force, the British military, etc., or anyone out in the private sector.

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When we looked at all the issues involved, such as the complexities of trying to look at the compensation plans in the U.S., the Netherlands and the U.K. compared to our own, and the tax implications and the tax structure, we decided after some thought we couldn't go that way.

Then we looked at the private sector and thought it would be harder to try to compare our armed forces with any group in the private sector, whoever it was, and decided to look at the current structure we already had and just try to improve upon it.

The one advantage we have in the current structure is that essentially we're all paid by the Canadian taxpayer. We are all paid from the federal government purse. It was felt that with the current comparability structure we had with a number of public service occupational groups, both on the officers' side and the non-commissioned members' side, we could just improve upon that, which is actually what we did. We did full benchmarking to make sure the groups we were comparing ourselves to in the public service were the proper groups.

[Translation]

Mr. Ghislain Lebel: Don't you doubt your scales when you see we have to force pilots to stay in the Canadian Forces? They are currently leaving in droves to go into civil aviation. Our comparability criteria may not be the best.

[English]

Mr. Tony Rizzotto: No, but there is actually something in the military pay rates called the pilot differential, which means your typical pilot makes somewhere between 4% to 7% more than your general service officer, because of the fact they go through a lot more training, they're much more specialized than other officers in the military.

[Translation]

The Chairman: Thank you very much, Mr. Lebel.

[English]

Mr. Pratt.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chair.

Based on what I'm hearing from you with respect to the Auditor General's report of 1990 and the fact the review was started in 1992 and finished in 1996—

Mr. Tony Rizzotto: That's right.

Mr. David Pratt: —it's only eight years later that some of our members of the armed forces are just beginning to see some increases as a result of that review.

Mr. Tony Rizzotto: Okay, but the reason we could not carry out any of the impacts of that review was that we were subject to the public service compensation system, which for the military was in effect until March 31, 1997.

Mr. David Pratt: I realize all that, but I'm asking you to sort of take your Treasury Board hat off for an instant and respond to the situation as a Canadian might see it objectively, from the standpoint of the snail's pace at which this process has yielded any results for the members of the Canadian Forces.

It sort of begs the question, in many respects, as to whether or not, going back 10 or 15 years, the forces would have been better off with some sort of a professional association or staff association to negotiate with Treasury Board. Do you think, all things considered, they might be in a better position now had they been in that situation then?

Mr. Alain Jolicoeur: I will answer that. The answer is clearly no.

There were no changes during the freeze or during the period covered by the compensation act for any other groups. If you look at the eight collective agreements that have just been signed in the public service, the increases are less than half of what we're talking about.

Mr. David Pratt: I realize all that. That's not in dispute here. I guess what I'm getting at is maybe they might have been working from a higher base had they had an association to represent them with the government. Is that something you would agree with? I'm looking for a professional opinion here more than anything else.

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Mr. Alain Jolicoeur: My professional opinion is that I don't see how it would have made a difference. The basic analytical answer has to do with the way the linkages are worked out between the salaries in the public service and the salaries of the military. So if you have a formal link like that, I don't see how on earth it would have made a difference.

Mr. David Pratt: Presumably, though, the RCMP's staff association has had some impact with respect to their compensation. I'm not familiar with all the details of it, but I assume they have an association for a reason, which is that they have been able to negotiate better rates of pay and conditions of work.

Mr. Alain Jolicoeur: The salary has not been established by negotiation for the RCMP.

Mr. David Pratt: Okay.

One of the issues that has come up in the hearings has been the question of speciality pay, especially for corporals. If they develop a certain expertise in an area, they are locked in under the current pay structure. They may not be adequately compensated as a result of that.

Can you tell me if Treasury Board right now is looking at the whole issue of specialty pay and how it might be applied to some specialized technical work that people like corporals do?

Mr. Tony Rizzotto: As for the work regarding speciality pay for corporals, sergeants, et al., the background work is actually done at National Defence. We then get to see it and actually discuss it at the Treasury Board Secretariat. This is the DND advisory group on military compensation, which meets once every four to six weeks. After we've had a chance to look at it, DND at that point decides whether they will come forward with any sort of submission to TB ministers or not.

I know there's one going on right now. I think it's called the operations allowance.

Now, it's really strictly up to National Defence to come forward with these items. At that point, we will consider them. We'll analyse them, look at them.

Some of these do get approved, obviously. Some of them have been approved in the last few years. I can't name any right off, but they have been approved.

Mr. David Pratt: So this is something that's being dealt with on a case-by-case basis?

Mr. Tony Rizzotto: Basically, it's on a case-by-case basis, yes, because that's the way it works. I think it's a legal issue with the Queen's Regulations and Orders such that you can't do just give a full-blown increase to all allowances. Most of them have to be considered on a one-on-one basis.

Mr. David Pratt: I'm not talking about allowances, I'm talking about.... Let's say a person repairs radio systems or ground radar systems for the military, and that person is a corporal. It's not a special allowance that they would get for doing that. Presumably, it would be worked into their regular rate of pay in terms of that particular technical expertise they have, would it not?

Mr. Tony Rizzotto: Right, but those sorts of things would still have to go through the same method, the same scheme anyway.

Mr. David Pratt: Where would you say that process is with respect to the range of technical occupations that you have within the military?

Mr. Tony Rizzotto: I really couldn't say where they are right now. I don't really know.

Mr. David Pratt: I don't know about my colleagues, but we certainly didn't hear much that I can recall about people being eligible for, and/or receiving any special rates of pay. I stand to be corrected on that, but I don't recall it having been mentioned.

How much time do I have, Mr. Chair?

The Chairman: Three and a half minutes.

Mr. David Pratt: Okay. Here's another question.

With respect to the x factor, that was something that we just learned about recently. How closely are you looking at that right now, and what sorts of factors might be included in any review of the x factor?

Mr. Tony Rizzotto: In the four-year review, we did look at the x factor, which was first established, I think, in 1974 at 4%.

Basically, it's composed of a separation allowance, a turbulence allowance, as I think it's called, and the last one, which is a posting allowance, at 0.5%, 1.5% and 2% respectively.

We did look at that 4% total in 1994. I seem to remember that's what it was. We did look at the breakdown among those three items.

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After much thought and trying to figure out what else we could do, we looked at other militaries. Basically, our 4% is very comparable to a unique military factor that's also awarded in at least three other countries.

Are we looking at it right now? The answer is no. It was looked at in 1994, for the first time in about 10 years.

It's a very subjective value. It was a value of 4% set up over 20 years ago. There really has been no justifiable, defendable reason to raise or lower it since then.

Mr. David Pratt: In terms of the work you do with the Canadian Forces, have you had the opportunity in your own day-to-day workaday world to go out and talk to members of the Canadian Forces, to find out what's on their mind and to get a handle on their quality of life?

Mr. Tony Rizzotto: To actually go out to talk to members of the military? No, we don't. We deal mainly with the people here at the headquarters who represent them.

Mr. David Pratt: Have you formed any impressions—and if anyone wants to jump in on this, they're welcome to—with respect to the pay of our military in terms of all of the benefits, etc., in comparison with other comparable countries, including, say, France, Germany, the U.S., or Great Britain? Have you formed any impressions on how our people are compensated?

We did hear some interesting things a few weeks back from the Canadian Forces housing agency. They advised us that our military was probably one of worst housed in the world. I'm wondering how the pay stacks up in comparison with the housing.

Mr. Fernand Lamarche: Housing is an issue. It's one we recognize. DND had about 23,000 housing units out of a stock of about 30,000 in Canada. This is why the housing authority was set up. It was to link what the requirements are, present and future; to manage it as a real property; to align it with the needs of the department and the bases; to bring up the infrastructure where it's needed; and to get out of housing where it's not needed so that it can get a better fix.

The whole idea behind setting up the housing authority as a single, stand-alone organization is to be able to review this within the DND and come in with proposals as to how we're going to handle all of this housing stock.

To answer a previous question, on some issues we have been out to bases. When we were reviewing isolated posts and housing allowances, for example, about three years ago, we did go out, not just to see the military but also to look at the people in the communities, some of them in the remote areas, to get a feel for what they had to contend with so that we could adjust accordingly. As an employer, we're trying to provide adequate and good service to the employees who are working for us, basically.

The Chairman: Thank you, David.

We now go to the five-minute round. Mr. Benoit.

Mr. Leon E. Benoit (Lakeland, Ref.): Thank you, Mr. Chair.

Good afternoon, gentlemen. I'd like to get short, concise answers to these questions, if I could. We have only five minutes.

To start with, I want to ask if any future increases that go to the groups within the public service that are used to compare with the different ranks will automatically go to the corresponding rank in the military.

Mr. Alain Jolicoeur: The answer is that the two economic increases that have been given, the 2% for last year and this year, were on the projected increase in the public service. If the increases are larger, there will be further adjustments to reflect that.

Mr. Leon Benoit: Is the answer yes?

Mr. Alain Jolicoeur: The answer is yes, there will be....

Mr. Leon Benoit: Did I hear a “but” there?

Mr. Alain Jolicoeur: There will be further adjustments if they are higher than that.

Mr. Leon Benoit: Are the additional costs that have been downloaded on the men and women in the forces, particularly over the past couple of years, taken into account in this pay schedule in any way?

Mr. Tony Rizzotto: What kinds of costs are you talking about when you say “downloaded”? Such as what?

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Mr. Leon Benoit: Fees on bases, for example. It used to be that families had fees for recreational facilities included, but now there's a charge. For example, as one of the members at Trenton said, the new food program is going to more than double the cost of food for those who are staying on the base and really have no choice but to eat at the food services provided there. The increase is from about $200 a month to $450. It's those types of things. There is a whole group of costs that have been downloaded onto the men and women in the forces, yet there hasn't really been any way for them to make it up in terms of pay.

Mr. Tony Rizzotto: When we started our four-year review, I think we identified about 180 to 190 elements of pay or pseudo-pay. Some of them were things like fees for rec facilities, being able to use the CANEX, and those sorts of things. When it came to comparing the total compensation to the public service, it was decided that we had to stick to the elements that were strictly salary-related, that were pay-related.

Mr. Leon Benoit: Okay, but the important thing that probably hasn't been taken into account here at all, though, is CANEX, for example. It's funny you should mention that, because the prices at CANEX have gone up to the point where in most cases they're completely useless to the people who use the service. Many of them are going off base to get their supplies, rather than using CANEX. Maybe when you started your analysis things were much different. Maybe there was a benefit there then. It's not there any more.

Mr. Tony Rizzotto: That could be true, though if I'm not mistaken, I think the CANEX is run through the non-public funds agency or something like that.

Mr. Leon Benoit: Yes, I know how it's run. I was just asking you if it was taken into account.

Mr. Tony Rizzotto: No, it wasn't.

Mr. Leon Benoit: The other questions are on the pay for top officers. I would like you to lay out very clearly, so that even the Liberals could understand it, exactly what pay increases have taken place to the top brass in the past two years—let's use generals as an example—and also those proposed for as long as any projections have been made. I'm not just asking for up until last October, because a lot of the proposed and actual increases have taken place since then. I'm talking about pay, I'm talking about any kinds of bonuses, and all of that.

Mr. Tony Rizzotto: I seem to remember that the top senior military officers, these being the ones from colonel to lieutenant-general, received their performance pay for the 1996-97 fiscal year, and that is the last one they received. I do not think 1997-98 has gone through yet, and I'm not sure what the rate for that will be.

Mr. Leon Benoit: Why wouldn't you be sure?

Mr. Tony Rizzotto: Because we're actually still working on those numbers right now.

Mr. Leon Benoit: What's the rationale that you use? First of all, I want to nail you down on the pay. What about pay? Over the past few years, and for any projections that have been made, what increases are in the works or have happened?

Mr. Tony Rizzotto: Right now, the senior military officers are compared directly to the EX group. There was a senior officers pay study done over the last two years, so we will have to take the results of what was done for the EX group and see how they apply, if they even do.

Mr. Leon Benoit: The EX group being...?

Mr. Tony Rizzotto: The executive group in the public service.

Mr. Leon Benoit: Oh, yes.

Mr. Tony Rizzotto: We will have to see how that applies to the senior military officers, if it does, and that work is ongoing right now.

Mr. Leon Benoit: So we're not getting any answer there.

Mr. Tony Rizzotto: No, that's the problem. I can't tell you what the percentage is.

Mr. Leon Benoit: No? Well, we've heard the minister's office announce these pay increases. Bonuses have been announced. These announcements have been made. Are you saying you don't know how many dollars go to, for example, a general with these announcements?

Mr. Alain Jolicoeur: I will try to answer that as clearly as I can.

• 1625

For the general service officers, we have a number that compares exactly with the non-commissioned members for the two years that I've used before, last year and this year. It's 9.5% rather than 9.3%. When you raise it a level above that and start at colonel and up, you are then into a totally different category. The only thing that was announced was the performance pay, which is part of their compensation package, nothing new, for 1996-97. That is more than a year behind its time. The next decision for them will be performance pay for 1997-98. That decision has not been made, and of course it has not been—

Mr. Leon Benoit: What about the pay increases, though?

Mr. Alain Jolicoeur: There has been no decision on that either.

Mr. Leon Benoit: Since 1996-97?

Mr. Alain Jolicoeur: That's right.

Mr. Leon Benoit: What about generals? What about the ranks above colonel? That's what I was asking about.

Mr. Tony Rizzotto: Colonels and generals did not receive any economic increase in 1997. The troops, the GSOs and the NCMs received 4% or 5%.

Mr. Leon Benoit: Are there any that have been approved for 1998 and beyond?

Mr. Tony Rizzotto: For generals and that, no, not at all.

Mr. Leon Benoit: For generals?

Mr. Tony Rizzotto: No.

The Chairman: Mr. Benoit, you can come back later.

Mr. Leon Benoit: Okay.

The Chairman: Madame Venne.

[Translation]

Mrs. Pierrette Venne: Good day, gentlemen. You obviously know that the Defense Minister announced increases and adjustments on Friday, as we have been talking about them for a while. I would like to know, since you haven't said it up to now, what the overall cost of these increases will be. Do we have it? Can you supply it?

[English]

Mr. Tony Rizzotto: In regard to the press release that came out on Friday from the Minister of National Defence, the cost of the third instalment for the wage comparability schedule, which was approved by Treasury Board about a year ago, is about $51.5 million. The cost for the economic increase, which is exactly 2% for GSOs, NCMs, and all allowances, was $69 million.

[Translation]

Mrs. Pierrette Venne: Agreed. As for the pilots, we know the Minister was ready to announce salary increases. I also expected— we are talking about the increases announced Friday—that the Minister would announce the implementation of the incentives for pilots, a program that would give pilots a bonus of between $35,000 and $75,000, according to what we have read in the newspapers, if they agreed to extend their contract with the Canadian Forces by five years.

Here is my question. Has the Treasury Board decided to set this program aside or is it ready to approve it soon as the rumors say?

Mr. Alain Jolicoeur: Perhaps I can give you the beginnings of an answer. At this time, there is no request before the Board on that subject. I know that DND is analyzing such a possibility, but that's where it stands at the moment. No decision has been taken.

Mrs. Pierrette Venne: You have not been asked to look at such a proposal.

Mr. Alain Jolicoeur: We know it is being discussed. I am aware of what is being looked at, but no formal request has been presented at this time. The process to be followed is that the Department's formal decision to set up a given program will be transmitted as a Treasury Board submission. It will be analyzed by the Secretariat at that time.

Mrs. Pierrette Venne: And you have not received it yet.

Mr. Alain Jolicoeur: No.

Mrs. Pierrette Venne: Good. The pilots were cheering the other day. We will tell them to take things calmly.

My other question is on double-dipping. Recently, the Union of National Defense Employees denounced the problem of double-dipping by some senior officials who left the Canadian Forces to take on a job in the federal Public Service. We are thinking of vice-admiral Murray, who recently left the Canadian Forces for the position of assistant deputy-minister at Fisheries and Oceans Canada; in addition to his salary as a deputy minister, estimated at about $130,000, the vice-admiral received severance pay of $80,000 and also receives an annual pension of $80,000. That is not the only example. There are others being talked about in certain magazines we receive.

• 1630

To the best of my knowledge, the military are the only ones who can receive both a pay check and a government pension. I would like to know if you believe the system should be changed to avoid this kind of double-dipping.

Mr. Alain Jolicoeur: Obviously I cannot comment on any specific case.

Mrs. Pierrette Venne: I have others. I have the one of Pierre Lagueux, where...

Mr. Alain Jolicoeur: No, no! In any case, I will not respond about one individual or another.

Mrs. Pierrette Venne: No. I want you to answer on the principle.

Mr. Alain Jolicoeur: In the Public Service, which I know better, it is not possible to be employed and to receive a pension at the same time.

In the case of the military, I believe it was a benefit granted to them as part of their contract at one time. But I don't know what the current situation is.

Do you wish to respond, Mr. Rizzotto?

[English]

Mr. Tony Rizzotto: One of the perks, if I can call it that, of being in the armed forces is that you can serve your 15 or your 20 years. At what they call the 20-year point, usually at about age 40, you can start drawing a military pension and at the same time become a public servant. This is one of the extra benefits, if I can call it that, to being in the military.

There are some public servants, as you mentioned.... Retired Vice-Admiral Murray, for example, is one them like that. It isn't anything we have been asked to look at. It isn't anything.... I don't know.

[Translation]

Mrs. Pierrette Venne: So you are telling me that you have not been asked to look at this kind of double-dipping and that you will not do so until someone asks you to.

[English]

Mr. Tony Rizzotto: No, no. But there are cases where we realized there were people, for example, in the military who received what was called the FRP, the forces reduction program, before 1994, who could turn around and in the following week or two become public servants. At the secretariat, we insisted that anyone who left under that program could not turn right around with this huge package and then become a public servant. That line or two was added in the application form so they could not do that. They had to wait, I think it was up to one year, before they could join the public service.

[Translation]

Mrs. Pierrette Venne: But those who are doing it, have the right to do it, will continue to benefit from this double-dipping. There is still an entire category of military people who will soon have the right to collect their pension and be compensated as public servants, as members of the Public Service. That double- dipping actually exists.

If no one asks you to look into this double-dipping, you seem to find it normal and I find that it is not... Finally, I am asking for your personal opinion. I am asking you if you can, on your own, decide to look at this more closely to see if it not somewhat incongruous, or if you absolutely wait for someone to ask you to do it.

Mr. Alain Jolicoeur: It is not something we look at, except in cases where monies have been given to people so that they quit the military life. A while ago, Mr. Rizzotto alluded to the FRP. In ordinary cases, that is part of the conditions of employment. That is not something that is astonishing to us or that causes a problem for us. It was part of the conditions of employment for people who were employed by the Canadian Forces. Their contract specified that at the end of their military career they would have the right to do so.

It was set policy and not a problem that surfaced afterwards.

Mrs. Pierrette Venne: But in setting this policy I do not think we were expecting someone to earn $130,0000 in salary as a deputy-minister, receive a pension of $80,000 and receive severance pay of $80,000. I don't think those amounts were foreseeable at the time. However, that is now the case, since some people have had that opportunity and they still have it. That is why I wonder if this issue should not be studied more closely. Could you do it? Could you examine this policy?

• 1635

Mr. Alain Jolicoeur: Yes, we could certainly study that policy.

Mrs. Pierrette Venne: On your own, could you do it?

Mr. Alain Jolicoeur: Yes.

Mrs. Pierrette Venne: Good, that's what I wanted to know. Thank you.

The Chairman: Thank you very much.

[English]

I have a question for you before I go to Mr. Hanger. It concerns the triple-A allowance. What I have difficulty understanding is why the allowance is taxable. I know we give it out to even out the higher cost of living that some CF personnel will endure because they are transferred to parts of the country, like Esquimalt, for instance, where the cost of living is so much higher than it is in the other places. But if Treasury Board decides to give them x number of dollars and then the benefit becomes taxable, it seems to me that we are defeating the purpose of giving the allowance in the first place.

Mr. Alain Jolicoeur: First of all, it's a Revenue Canada question. It's a little bit of a mystery to me as far as what is taxable and what is not—and it varies in all kinds of circumstances—but presumably it's to apply to the public service and the military the same discipline that is applied to the private sector with similar allowances. I would rather perhaps find the answer for you from Revenue.

The Chairman: I'd like it if you could get the answer for me.

With respect to the Treasury Board Secretariat, members from DND also sit on that, if memory serves me correctly.

Mr. Tony Rizzotto: Are you talking about the AG, the advisory group?

The Chairman: Yes.

Mr. Tony Rizzotto: Yes, there are three or four members from National Defence at that table and three or four are from the secretariat.

The Chairman: When you discuss increases in allowance is there somebody there from Revenue Canada, for instance?

Mr. Tony Rizzotto: No, there isn't.

The Chairman: I see.

Mr. Tony Rizzotto: If taxation issues are raised at the table, we always go back to our contacts at Revenue Canada to ask the question, or internally within the two departments we ask the question, and then that way we get the answer. But are they actually at the table? No, they're not.

The Chairman: Mr. Jolicoeur, just one last question. In your opinion, do you think it's right that an allowance is taxable?

[Translation]

Mr. Alain Jolicoeur: I'm sorry, but I really don't know because I really, really not a tax expert. I would prefer to not make any statements on that issue.

The Chairman: Thank you. Agreed.

[English]

Mr. Hanger.

Mr. Art Hanger: Thank you, Mr. Chairman.

I'm just looking at your presentation, sir, and at one of the bullets at the bottom of the first page you mention that in 1968 terms of reference were established for the “DND/TBS Advisory Group on Military Pay and Conditions of Service”. Now the name is obviously changed to “TBS/DND Advisory Group”. Why that particular change? And what has actually and in fact changed in the group?

Mr. Tony Rizzotto: You're asking why was it changed from DND/TBS to the other way around?

Mr. Art Hanger: Yes.

Mr. Tony Rizzotto: That I could not answer.

Mr. Art Hanger: Okay. What has in fact changed with the board?

Mr. Tony Rizzotto: What we decided is that this AG, this advisory group, spends almost all of its time looking at strictly military compensation rather than the actual conditions of services, the actual way that the military has to go out there and work. We concentrate mainly on the dollars, on the compensation side, which is why that part of it was changed, to state strictly “military compensation”.

Mr. Art Hanger: So you don't deal with conditions of service?

Mr. Tony Rizzotto: We do discuss them, but if there are dollar implications involved, yes, we do look at them.

• 1640

Mr. Art Hanger: So who then deals solely with conditions of service?

Mr. Tony Rizzotto: Sometimes those go directly to the secretariat from the people involved at National Defence. That does happen sometimes.

Mr. Art Hanger: Here you have a—

Mr. Tony Rizzotto: That's similar, if I could say, to pensions. The whole issue of military pensions is not dealt with through this committee. There is a separate AG or advisory group strictly on the Canadian Forces superannuation plan, and they meet once every two or three months.

Mr. Art Hanger: But what I see here, just from what you've been telling me, is that there's a substantial change in mandate, then, of this advisory group.

Mr. Tony Rizzotto: I wouldn't say it's a substantial change in mandate. We still discuss the conditions of service at the table.

Mr. Art Hanger: It's not a priority.

Mr. Tony Rizzotto: It may not be as much a priority as the dollar issue, the compensation factors and issues.

Mr. Art Hanger: I can see something being lost just in this change in mandate, really. If you're no longer considering the conditions of service a priority, but rather compensation, then nobody is really effectively dealing with conditions of service, and this is probably why everything is in such a mess as it is.

Mr. Tony Rizzotto: But the conditions of service discussions are still part of the terms of reference and mandate of the advisory group.

Mr. Art Hanger: But you just clearly pointed out to me that it's no longer the priority of the advisory group.

Mr. Tony Rizzotto: No, but if you set it up in a list of priorities, the number one priority is the dollar side of it, the compensation side. That's all I was saying.

Mr. Art Hanger: Yes. I can see something being lost with that change.

I would like to ask Mr. Lamarche a question. You're with the National Joint Council.

Mr. Fernand Lamarche: Yes.

Mr. Art Hanger: What is that?

Mr. Fernand Lamarche: It's a council that represents all of the departments and all the unions, to negotiate or to review policies that have a federal perspective—for example, relocation, housing, foreign service directives, and isolated posts—where it doesn't have too much value to have each bargaining unit come in and bargain these clauses individually, where it makes more sense to have one policy for the whole of the public service.

Around the table you have a full gamut of unions that talk on behalf of their counterparts, and you have departments that are participating in it. If I can think of the travel committee, for example, we have a DND representative at the table. Because they can have an impact on the military, we want to ensure that the terms and conditions are being addressed, and we have people from the grassroots who are able to influence the way these policies are directed.

Mr. Art Hanger: Okay.

This may be a bit of a zinger question, but why is the military and foreign service treated so much differently than those with strong bargaining agents when it comes to housing allowances and other issues that pertain to their memberships? The foreign service is even treated differently than the military when it comes to housing.

Mr. Fernand Lamarche: If I take the Canadian counterpart and if I go through, say, your isolated post, your crown housing, your travel and your relocation, these are basic policies where you will have about 80% to 85% of the essence being the same for everybody. When we're having to relocate somebody you're having to have them pack, load the stuff in the truck, get to where they're going, and so on. So these are common elements.

What we do also—and this is based on consultations with the military and the RCMP as their counterpart—is we have to adjust to situations that may be unique to the forces. I was referring a while ago to the equity protection, for example, that we have for the military when they're selling their homes.

One of the elements we also have for the military that nobody else has in the public service is what we call exit relocations, basically last postings. If public servants work here and decide to retire here or retire in another city, the final relocation is at their own expense—

Mr. Art Hanger: Right.

Mr. Fernand Lamarche: —whereas the military gives assistance to the posting they want to go to or the city they want to go to—

Mr. Art Hanger: If they're granted that.

Mr. Fernand Lamarche: —recognizing the fact that they have had to move a lot in their careers, and not necessarily by choice.

• 1645

Mr. Art Hanger: This leads into a whole series of other questions about, if you will, compensation when things go wrong. We'll stick with the military in this particular case. If military families are requested to move from point A to point B, and their posting is quite different from the first, or the one they just left, and things are not conducted in a proper manner—their equipment or goods are damaged, or whatever the case may be—who's responsible?

Mr. Fernand Lamarche: In terms of move management, if you're looking at equipment or damaged property, personal effects, or furniture, we have gone through a series of changes in that particular contract.

You probably know that DND is the lead in this type of negotiation in the contracts with Central Removal Service, which is a commonality. Because DND moves more than anybody else does, it's appropriate that DND would be involved to the degree it is at the negotiations in the development of the terms and conditions and parameters to ensure that moving is done in an appropriate way.

In the last contract we had we went to full carrier liability, which has gone a long way, I think, towards addressing a lot of the problems. In full carrier liability, the mover assumes the full liability of any damage or loss to personal effects as they're being moved.

This is in response to a situation where we had uni-risk insuring. We were sort of in partnership with the industry, which created all kinds of problems.

There's no perfect scenario, but we try to improve as we go along. We try to find the proper tools to ensure that there's the least damage and least disruption possible, keeping members whole from one community to another.

Mr. Art Hanger: There certainly will be that effort made to have the least amount of damage, but the problem that's happened with the military—and this is becoming more evident as time goes on; nobody wants to take the responsibility—is that when a military family is moved from point A to point B, and things do not turn out the way they should—maybe there is damaged property, maybe there is missing property—that military family is on their own. They have to go and scratch around with the moving company, with those who contracted out, and they are given the run-around.

It used to be the case, from my understanding, that the military base commander, or at least somebody on the base, said, “Look, clean it up. You're moving DND property. This is as much my responsibility as it is that family's.” In fact, the pressure was taken off the family. There was somebody looking after it. Now they're left on their own to fend for themselves.

Here we have a significant change in policy, obviously, and no one really seems to want to pick it up. They say, well, no, it shouldn't be happening. It's DND responsibility, yet no one wants to take the responsibility of looking after that family as they move from point A point B. They leave them to fend for themselves, basically.

Mr. Fernand Lamarche: The best answer I can give on this one is having DND play the critical role it is playing in the definition, or the writing up, of the RFP for the contract, in the analysis and the day-to-day operations, if you want, of a contract of that nature, recognizing that you want to provide front-end, hands-on knowledge of what's going on in the industry, with a view toward trying to keep it as clean and as simple as possible.

Beyond that, I mean....

Mr. Art Hanger: So the fact that these were former policies, obviously, which are not any more, or maybe they're policies still but are not being adhered to, doesn't come into play here with you.

Mr. Fernand Lamarche: The policies have to come into...because the suppliers that are moving have to respond to pretty specific terms of contract.

Mr. Art Hanger: My point, sir, is that the policy, from what I understand, is still there, but it's not being adhered to. It is the responsibility of DND to look after their own and help those families that move and that have had properties damaged in the move.

Who is going to take the responsibility? Is it the base commander or is it somebody he's going to delegate that authority to?

Mr. Fernand Lamarche: I guess the same question would be raised with other departments that are having to use the same mechanisms as DND, because we're using the same tools. We're trying, with the volume buying we're doing, to ensure that there is rigour and discipline in this type of move.

• 1650

With the number of moves we handle in a year, it's impossible that you will not have situations where you have damage or loss, but we're trying with the mechanisms we have in place to address that and keep these to a minimum.

Each department then has to determine how they're going to deal with their own issues when they come up as a user of this common service and with the clout or weight that they can carry against the suppliers who are being paid for the delivery of their services.

The Chairman: Mr. Hanger, thank you.

Mr. Richardson.

Mr. John Richardson (Perth—Middlesex, Lib.): Thank you, Mr. Chairman.

There's always a bit of confusion around reserve pay. The Department of National Defence has been the best at fogging it up because it makes it look like they're equal. You say it's 85% of reserve pay rates of what? What's it based on?

Mr. Tony Rizzotto: Reserve force pay rates up until 1997, I think it was, depending on the rank and the military occupation you were in, could have been anywhere from 55% to 60%, up to about 95%, of the regular force pay in similar military occupations and ranks, and years of service in that trade, or IPC. In fact, when it came, I think, to the private recruit or the private basic, the reserve force pay was actually a little bit higher than that of the regular force.

It was decided after two or three years of study that what was needed was to have a flat rate whereby all reservist were paid at the same percentage of the regular force pay rate. It was decided that 85% was a good rate. We did an analysis to pick that figure.

Mr. John Richardson: So it's 85% of the rate. Now, consider the rate. Just as a young recruit would go up after so many years in rank and/or an officer would go up after so many years in rank, do the reservists get the same step by step for time and rank?

Mr. Tony Rizzotto: Essentially, they do. Yes. My understanding is that they go through the same steps.

Mr. John Richardson: You're going on record here.

Mr. Tony Rizzotto: Yes, I know. That's why I said “My understanding is”.

Mr. John Richardson: You covered yourself there, but if it isn't that, we'd like to hear back from you as soon as possible.

Mr. Tony Rizzotto: Okay.

Mr. John Richardson: Reserve pay rates have always been a problem for us as a public relations gesture. They're coming in. We watched them serve in Bosnia. We watched them serve elsewhere.

They seem to be doing a good job, and we would like to see that we get the fog out of their pay rates and see that we get them paid on time.

The Chairman: Thank you, Mr. Richardson.

Mr. Lebel.

[Translation]

Mr. Ghislain Lebel: In your document, you alluded to Chapter 21 of the Report of the Auditor General to the House of Commons. Were there two elements to the Auditor General's recommendation? Has there been a study or a project developed or something else on this issue that clearly defined the conditions of military service and the role played by different people? Is that in place? That is my first question.

Also, as stated in the following paragraph, the roles of the Treasury Board of Canada and the Department of National Defense are defined as employers or payers, but have we clearly defined the role of the military?

[English]

Mr. Tony Rizzotto: What we did, sir, in that four-year period—maybe it was a five-year period—between 1992 and 1996 was to look at the way that military pay rates were established and compared to the public service. We looked at the 180 or 190 terms and elements of compensation for the military.

Some of these would be considered to be a part of military conditions of service. There were things like housing, triple-A, posting turbulence, separation allowance, etc. This was all part of this long-term study.

• 1655

[Translation]

Mr. Ghislain Lebel: In other words, do we have in the military what would constitute a job description in industry?

Mr. Alain Jolicoeur: In my opinion, that is a question that should be asked of the DND representatives rather than of us of the Treasury Board Secretariat.

Mr. Ghislain Lebel: But how can you establish a pay scale if you don't know what the military is doing? It's kind of awkward. When I call my plumber, I know he will be doing plumbing work, but if he starts talking about medicine, I start to think I may have called the wrong person and that I may not be paying him appropriately.

Mr. Alain Jolicoeur: Obviously, it had to be taken into account in the context of the comparability study. Obviously defining the role of the military is not the responsibility of the Treasury Board Secretariat.

Mr. Ghislain Lebel: Yes, but as the auditor was telling you, there must be a close relationship between the Treasury Board and the Department of National Defense in order to develop a pay scale.

Mr. Alain Jolicoeur: Yes, to the extent that it is necessary to establish comparability, but the way you framed the question goes somewhat beyond the responsibilities of the Treasury Board Secretariat.

Mr. Ghislain Lebel: Let's go back briefly to the point raised by the member of the Reform Party about moves. Is the mover really the legal agent of DND in that case? It is DND that hires him and pays him. The soldier who is being moved from one place to another has little say in the matter, or the mover and the price paid.

Mr. Fernand Lamarche: No. The contracts are awarded after a bidding process. The companies propose prices. They have well- defined criteria regarding storage en route, the duration of the move, responsibility in case of breakage or damage, etc. Each department reimburses the agency, called Central Removal Service, for the moving costs. DND pays its share to this organization for moving its members, civilian and military. We have to pay the movers.

Mr. Ghislain Lebel: It's not the military that pays.

Mr. Fernand Lamarche: It's not the military. It's paid on an overall basis.

Mr. Ghislain Lebel: Therefore, don't you think there is a legal or contractual link between the mover and the one who pays or hires him, i.e. the Department of National Defense?

Mr. Fernand Lamarche: Absolutely. It's the essence of the contract.

Mr. Ghislain Lebel: The why do we say to the military person, who is a third party, to deal with the mover when he has a claim to make? He didn't hire the mover or set the conditions of transport, but we tell him to deal with it. Don't you find that you are neglecting your obligations in this regard? You may not be in agreement. Your smile says a lot.

As for the move, we have been told that the mover often arrives at 8 in the morning. The spouses are barely up, the beds are not made, they haven't showered and haven't dressed the kids for school. The movers arrive in impressive numbers and start packing. That makes the family ill-at-ease. They arrive early, leaving the people no time to make breakfast, to make toast, to do their crossword... They arrive.

We are being asked to recommend that the evening before the packing the soldier be allowed to check in to a hotel and be reimbursed for the cost. We are also being asked that he be allowed to go to a hotel the night his things arrive at his new residence. Of course these two hotel stays would represent an additional cost to DND, but don't you think that it would be a recommendation to make to your superiors? I sure wouldn't like to live through that.

• 1700

Mr. Fernand Lamarche: There are two aspects. The orchestration of the move per se and traffic management, to use a fairly popular term, is left to base management. Whether the truck comes at 8 or 9, the Treasury Board has nothing to do with that.

In the current agreements, there are clauses on packing and unpacking. When the family's belongings arrive at the end of the day in Calgary, for example, we expect that it will spend the night in a hotel and will be reimbursed. Those are reasonable and reimbursable expenses under the collective agreements.

Mr. Ghislain Lebel: We would have to check, Mr. Lamarche. We were clearly told that those were not reimbursed.

Mr. Fernand Lamarche: That really surprises me.

Mr. Ghislain Lebel: We will check.

[English]

Mr. Fernand Lamarche: “Packing”, “unpacking”,

[Translation]

those were the terms used. We have it for the entire Public Service. We allow a maximum of two days at both the departure and arrival points.

Mr. Ghislain Lebel: In any case, that is not what we have been told.

The Chairman: Thank you very much, Mr. Lebel.

[English]

Mr. Benoit, last round. You have the last word, the last question.

Mr. Leon Benoit: Thank you, Mr. Chairman.

My first question is just following up on what Mr. Hanger asked about the name change from DND/TBS to TBS/DND. I'd like to know who proposed that change. Was it someone in the Treasury Board or was it the department?

Mr. Tony Rizzotto: That would have been a joint decision by the two departments.

Mr. Leon Benoit: I was asking who initiated it. Somebody must have proposed it.

Mr. Tony Rizzotto: I can't say who actually initiated it. I don't know.

Mr. Leon Benoit: I would like you to find that out and to—

Mr Tony Rizzotto: Okay.

Mr. Leon Benoit: —give us a clear explanation of who initiated it and why it was done, what the explanation was behind this name change.

Mr. Tony Rizzotto: Okay. I will do so.

A voice: And the mandate.

Mr. Leon Benoit: And the change in mandate, of course, that went along with the name change or that took place at the same time as the name change.

Second, at Trenton yesterday I heard from several people—probably four to half a dozen—who actually asked me this question: “What happened to the retroactive pay increase that we were promised?” They said that this 2% and the 1.5% doesn't cover it. They were also promised retroactive pay. In recent months they were promised pay back to April 1, retroactively from April 1, 1997. Do you know what they were asking about?

Mr. Tony Rizzotto: The only thing I can think of that they were talking about was the 2% economic for the military approved by TB ministers in late November, 1997, retroactive to April, 1997.

Mr. Leon Benoit: But that was paid out.

Mr. Tony Rizzotto: Why some of these people are saying that they haven't received that pay.... We're not involved in the forces pay system. If that has happened, we don't know why.

Mr. Leon Benoit: So you wouldn't know whether that had actually been paid or not?

Mr. Tony Rizzotto: What I do know is that the TB ministers approved the increase going back to April 1, 1997, and I would assume that amount has been paid out to all the military, lieutenant-colonel and below, retroactive to April 1, 1997.

Mr. Leon Benoit: Okay. Just to try to clarify this, back to the pay increases for ranks above colonel...I know about the announcement on Friday for colonels and below, but for the ranks above colonel, in response to a question I asked, I believe you said there were no increases for ranks above colonel in 1997-98.

Mr. Tony Rizzotto: There was no economic increase in 1997 for military personnel above the rank of colonel. They did receive performance pay for 1996-97 and 1995-96, which is the same thing that the regular troops got, soldiers also.

Mr. Leon Benoit: And that's it. They received nothing else.

Mr. Tony Rizzotto: No, nothing else.

Mr. Leon Benoit: What about the Chief of Defence Staff and the deputy ministers, ADMs?

Mr. Tony Rizzotto: It's the same thing there, because the ADMs at National Defence are all at the lieutenant-general rank, so they did not receive anything other than the performance pay.

Mr. Leon Benoit: I've seen a document—it might have been one of these brown envelope things, but I don't remember the source, unfortunately—that showed.... It's been in the papers about the pay increases, that when you work in the performance bonuses it's between 19% and 40%. It's been written about in the papers on more than one occasion. This is nothing new.

• 1705

Mr. Alain Jolicoeur: Yes. Let me perhaps try to address that one. The numbers you are quoting are the numbers that were in the Strong advisory committee, and it was an advisory committee on compensation for executives in the public service. The government has announced that they will implement the recommendations in the Strong report—

Mr. Leon Benoit: So when I asked the question earlier, why didn't I get that answer?

Mr. Alain Jolicoeur: My earlier answer remains the same: that there is no decision on the application of the Strong report to the military. It's a report on compensation of senior executives in the public service.

Mr. Leon Benoit: But it would apply to those corresponding positions in the military as well.

Mr. Alain Jolicoeur: It could, but the decision has not been made.

Mr. Leon Benoit: Who makes that decision?

Mr. Alain Jolicoeur: It's the Treasury Board, actually.

Mr. Leon Benoit: I don't know if I didn't hear what you said, but I thought you said that this decision has been made.

Mr. Alain Jolicoeur: No, not that one.

Mr. Leon Benoit: It hasn't been made.

Mr. Alain Jolicoeur: No, it has not been made.

Mr. Leon Benoit: It's just been recommended in a report.

Mr. Alain Jolicoeur: No, not even that. The report is a recommendation for the salaries of the senior executives of the public service. It has nothing to do with the military. That's the recommendation in the Strong committee report and it's the recommendation that has been approved by Treasury Board.

Mr. Leon Benoit: That has been approved.

Mr. Alain Jolicoeur: Yes, for executives in the public service.

Mr. Leon Benoit: And you don't know whether it will carry over into the military?

Mr. Alain Jolicoeur: That's right.

Mr. Leon Benoit: So that's what you don't know.

Mr. Alain Jolicoeur: Right. That's what I don't know.

Mr. Leon Benoit: Okay. That clarifies that for me. Thank you.

I just have one other thing I'd like to ask for. As well as the information I've already asked for, I'd also like information.... If you could get a document that explains clearly and concisely which ranks in the military...the comparison, the public sector positions that are used to compare the different ranks in the military when arriving at the pay they will receive. I would like a document that would explain that in a clear, concise way.

Mr. Tony Rizzotto: We can provide you with a table that compares the military occupations in say the officer grouping to comparable public service groupings.

Mr. Leon Benoit: I'd like that as well. Thank you.

Mr. Tony Rizzotto: But we don't do it on a rank-by-rank structure. That is only done for one rank in the NCM area, which is the corporal rank, Corporal IPC4, which is the fourth step of the corporal rank. And in the GSO side, on the general officers side, it's done for a combination of captain to lieutenant-colonel. They're all put together. We don't do it for captain, major, and lieutenant-colonel separately.

Mr. Leon Benoit: So who does? Is that done in the military, broken down and decided, or is it just done as a general pay increase of a certain percentage?

Mr. Tony Rizzotto: Right. Once that comparability between the officers and the public service occupational groups is done, we then have this general annual salary.

Mr. Leon Benoit: What we've been told is that in fact a comparison was done—say, for example, the rank of corporal was compared to some category in the public service. Is that not correct? Was that done at some time in the past?

Mr. Tony Rizzotto: Not that I know of, at least not on a rank-to-rank or rank-to-level structure.

Mr. Leon Benoit: So how can we say that the military pay is somehow comparable to a certain group in the public service?

Mr. Tony Rizzotto: The one comparison done for the non-commissioned ranks, again, is the corporal step-four rate, and then that same percentage we get out of doing that analysis is applied to all the non-commissioned members.

Mr. Leon Benoit: Okay. Who is that corporal? What is the—

Mr. Tony Rizzotto: Corporal IPC4, it's called.

Mr. Leon Benoit: Corporal IPC4. What group in the public service was this rank compared to?

Mr. Tony Rizzotto: It was compared to a mix of I think something like 60 or 70 different occupational groups or levels. It's not just one.

Mr. Leon Benoit: Could you give me information that will show that so I can try to get a handle on this?

Mr. Tony Rizzotto: Yes, I could.

Mr. Leon Benoit: Thank you very much.

The Chairman: Mr. Benoit, I was just informed that we will be receiving this week sometime a document comparing the different positions between the Canadian Armed Forces and the public service.

Mr. Tony Rizzotto: And that's going to be the same one that I would be sending you, but I will check anyway.

• 1710

Mr. Leon Benoit: I would like to get them both.

Mr. Tony Rizzotto: Okay.

Mr. Leon Benoit: And could you promise me you won't talk among you?

Mr. Tony Rizzotto: Okay, we won't.

Mr. George Proud (Hillsborough, Lib.): He's on the record now.

The Chairman: Mr. Hanger, last question, short.

Mr. Art Hanger: Mr. Lamarche, I know that DND contracts out with certain movers to perform whatever moving capacity is required, and I assume it's right across the country. If one contractor gets it, is it basically the same contractor who covers from one end of the country to the other?

Mr. Fernand Lamarche: There is a series of contractors. One mover would never be able to handle all the volume, especially when you have all of your peaks condensed with your posting season, for example.

Mr. Art Hanger: When that contractor puts forward his bill, how do you know that what he's delivering is true and accurate, when you look at weight? I assume it goes by weight. How do you know it's true and accurate?

Mr. Fernand Lamarche: There's a whole machinery that's been set up with Public Works with DND that does audits, compares weights. They can actually determine the average weight across the public service, across the military, where all of these locations are being moved. You have people who are set up to handle this; it's called move management.

Mr. Art Hanger: I was talking to a young fellow a time back who actually worked for one of these moving companies. He was requested to sign bills of lading with weights that were fudged, that were inaccurate, and they were specifically designed for DND. If you were to receive information like that, what action would you take?

Mr. Fernand Lamarche: The Auditor General has looked at this. There's an ongoing debate. There have been reviews, there have been audits. This file has been a particularly interesting file in the number of different parties, reviews, audits and studies that have been done on it. We're trying to decide, do we go with weight, do we go with volume, do we go...? You know, there is obviously—

Mr. Art Hanger: You know this type of fraud and the way it is happening, then.

Mr. Fernand Lamarche: Oh, yes, We're trying to clamp down on it, but the volume.... The Auditor General has had meetings—it may have been in January or just before Christmas—trying with the industry and mobility companies to come up with a better design and see how we can improve on these, in view of the next contract. This has been spearheaded by DND, again, who is the major user of this type of service.

Mr. Art Hanger: At the present time, then, this matter or this problem has not been corrected.

Mr. Fernand Lamarche: I assume it has.... When there's fraud, there are mechanisms by which we can catch it, but it may be that some of it is systemic. What we're trying to address is the systemic issue.

Mr. Art Hanger: Yes.

Mr. Fernand Lamarche: There's a lot of focus and attention being paid to it.

You have to appreciate the complexity of this particular file. I mean, there are a lot of moves, a lot being crammed at the same time. There's an industry involved, there are members involved, there are people on the bases. It's a whole mix, but it is one that is being very closely looked at in all perspectives in view of the upcoming contract, whenever this contract expires. I don't know the exact date it's expiring, but I know it's upcoming.

Mr. Art Hanger: Yes. Fair enough. Thanks.

The Chairman: Gentlemen, thank you very much for your presence here this afternoon.

The meeting is adjourned.